KTFA: Samson: The global economy is heading into the abyss
10/19/2022 15:45:23
A report published by the American “Politico” magazine concluded that “the global economy is heading to the abyss” due to the total crises that the world is going through and from which central banks and governments everywhere suffer.
The report said that what is remarkable about the total economic crises that the world is currently experiencing is that “for the first time in recent memory, the United States is not in a position to manage the process.”
Soaring inflation, the Russian invasion of Ukraine, a looming energy crisis in Europe and a floundering government in Britain are “just a few of the components of a cube of disasters that central banks and governments face as they try to avoid painful recessions”.
The report noted that while “a sense of dread” surrounded meetings of the International Monetary Fund and the World Bank last week in Washington, Kate Davidson and Victoria Gheda, the magazine’s economics editors, reported that the United States is struggling to prepare a coordinated response, but the problem is that the United States, like other countries, is largely focused on trying to contain domestic crises.
The report says that the US Federal Reserve is at the fore in the storm of crises that the world is currently going through, as it raises interest rates and fuels recession risks in an attempt to control price hikes, which puts pressure on economies around the world.
“Ultimately, a lot of national policies are going their own way,” said Mark Sobel, president of the Forum of Official Financial and Monetary Institutions and a former US Treasury official. “The Fed will do what they usually do, and the Europeans will do what they always will,” he added.
Politico notes that global financial leaders were divided on a range of issues and were three days late in issuing the G-20 statement based on this week’s meetings. Among the differences: Russia’s sanctions, global oil production and global currencies.
It is noteworthy that inflation rates recorded record levels in most countries of the world during the last period, including the United States, which prompted the monetary authorities in Washington to raise interest rates to reach record levels, which led to a significant rise in the dollar exchange rate, which affected other currencies and exacerbated the problem of inflation in other countries of the world. LINK
