IMF’s Strauss-Kahn Seeks Recovery First “Then” Deal With Inflation

September 28, 2009 by · Leave a Comment
Filed under: Economic News 

Here you have it, I have been saying we are going to have a bout of inflation in a period of high unemployment and stagnating incomes.  Here is the quote from the International Monetary Fund’s (IMF) Managing Director, “Going out of the crisis will have consequences, we need to discuss an exit strategy,  But we need to secure the recovery before we address the problem” of inflation“.  To follow up, former Federal Reserve Chairman Alan Greenspan in a video conference made this statement as well, “In the next two to three years, we are going to have serious problems“.

With that being said, it fits with what statements have been made here against all these bailouts that were in effect “kicking the can” down the street and in my opinion, making the problem even worse that have not create large liabilities for the U.S. Government that  has affect our credit in the international community.  This weekend I wrote my “Theory of Deinflation” that addresses some of these issues in a manner to try and explain what is happening now and what we will see in the future.  (The Theory will be expanded as more thought is put into the subject).

Bloomberg, Kiev – Former U.S. Federal Reserve Chairman Alan Greenspan expressed concern over inflation, while Dominique Strauss-Kahn, the International Monetary Fund’s managing director, speaking to the Yalta European Conference in southern Ukraine, suggested first securing an economic recovery.
“Going out of the crisis will have consequences, we need to discuss an exit strategy,” said Strauss-Kahn during the video link. “But we need to secure the recovery before we address the problem” of inflation.

Governments worldwide responded to the financial crisis and the worst recession since the Great Depression by pumping cash into their economies. The results varied. U.S. unemployment is at a 26-year high of 9.7 percent.

“In the next two to three years, we are going to have serious problems,” Greenspan said in a video link from Washington with the conference.
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