Read more at https://www.channelnewsasia.com/news/business/imf-warns-us-fiscal--trade-policies-create-risks-to-global-economy-10433900
15 Jun 2018 02:48AM
Ricky Lim ·
The tax cuts will generate a near-term boost to growth but also "will elevate the risks to the US and global economy," and increase the size of those risks, the IMF said in its annual review of the US economy.
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Posted on :- 30 Nov 2017
It is thus important to watch out for Trump's "Boom and Bust" budget, fiscal policies (or his "Economic Yo-Yo" policies) - that artificially inflate economic growth (causing a spiking "Boom" for immediate gratification to his voters --- but will cause a sharp correction in the near term causing a sharp downturn correction - a "Bust" --- that will cause US recession --- and have the impact of pulling down the World Economy --- triggering a World Recession --- like in the past.
Like · Reply · 3 mins
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Posted on :- 30 Nov 2017
It is thus important to watch out for Trump's "Boom and Bust" budget, fiscal policies (or his "Economic Yo-Yo" policies) - that artificially inflate economic growth (causing a spiking "Boom" for immediate gratification to his voters --- but will cause a sharp correction in the near term causing a sharp downturn correction - a "Bust" --- that will cause US recession --- and have the impact of pulling down the World Economy --- triggering a World Recession --- like in the past.
Like · Reply · 3 mins
Like · Reply · 1m
Ricky Lim ·
And while Trump has crowed repeatedly about the strong US economy and the beneficial impact of the massive income tax cuts passed in December, the reforms have a high budgetary cost and could fuel faster inflation, the IMF said.
That in turn would prompt the Federal Reserve to raise interest rates more aggressively, setting off a chain of spillover effects on the global economy, and financial markets, especially emerging markets, the IMF cautioned.
Lagarde also noted that the recent US economic stimulus could increase US imports, which, along with a strengthening US dollar, would in fact worsen the trade and current account deficits.
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Posted on :- 30 Nov 2017
Ricky Lim ·
Singapore
Trump drastic cuts in taxes, and boosting rampant spendings - is creating a ballooning fiscal deficit --- and increasing debts for US - and its future generation will have a hard time servicing the debt.
Together with this banking regulation - Trump is creating a condition for financial crisis or meltdown of the past.
Trump don't seems to care about the future - and bend on immeditate gratification.
World Economy and finacial institutions must be careful and watchful of what will come out from Trump financial and fiscal policies --- and not let it drag down in a domino effect of the past.
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ricky l 2 seconds ago
Wonder how can a Country sustain trillion dollars of debt and need to service hundred and billions dollars of debt interest?
Will the Country even able to repay the debt?
Wonder by deregulating the banking sector, will banks and financial institutions again resort to risky investment and put all the investors and depositors money into big risk of default and run-on bank again.
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Ricky Lim ·
Singapore
Trump obviously have forgotten or try to forget the lessons learn from US past finanical crisis :-
(1) US taxpayers money of hundred and hundred billions of dollars are used to prop up US banks and finanical institutions like BOA, JP Morgan, Citibank, AIA, etc - when financial crisis hit from its sub-prime investments in toxic assets. ----- Now Trump want to dismantle the banking regulation - to protect its financial industries.
(2) US Treasury have to borrow trillions of dollars by selling bonds to China, Japan, Saudi - to fund its massive budget deficit. --- Now Trump want to cut its tax in huge percentage, boost its spendings and balloon its debt and widen its budget deficit.
(3) US Treasury have to pump prime its Economy ---- by printing US dollars to repay its debt. ----- Now Trump think that he can do this again if US Economy go into "cyclic boom and bust" cycle --- with Trump risky policies - for immediate gratification but no regards for the future US generations.
--- Can the World not be careful and watchful on what Trump try to do --- and trigger a domino effect on the World financial system in the near future?
That in turn would prompt the Federal Reserve to raise interest rates more aggressively, setting off a chain of spillover effects on the global economy, and financial markets, especially emerging markets, the IMF cautioned.
Lagarde also noted that the recent US economic stimulus could increase US imports, which, along with a strengthening US dollar, would in fact worsen the trade and current account deficits.
--
Posted on :- 30 Nov 2017
Ricky Lim ·
Singapore
Trump drastic cuts in taxes, and boosting rampant spendings - is creating a ballooning fiscal deficit --- and increasing debts for US - and its future generation will have a hard time servicing the debt.
Together with this banking regulation - Trump is creating a condition for financial crisis or meltdown of the past.
Trump don't seems to care about the future - and bend on immeditate gratification.
World Economy and finacial institutions must be careful and watchful of what will come out from Trump financial and fiscal policies --- and not let it drag down in a domino effect of the past.
Like · Reply · Just now
ricky l 2 seconds ago
Wonder how can a Country sustain trillion dollars of debt and need to service hundred and billions dollars of debt interest?
Will the Country even able to repay the debt?
Wonder by deregulating the banking sector, will banks and financial institutions again resort to risky investment and put all the investors and depositors money into big risk of default and run-on bank again.
Less
Reply
Ricky Lim ·
Singapore
Trump obviously have forgotten or try to forget the lessons learn from US past finanical crisis :-
(1) US taxpayers money of hundred and hundred billions of dollars are used to prop up US banks and finanical institutions like BOA, JP Morgan, Citibank, AIA, etc - when financial crisis hit from its sub-prime investments in toxic assets. ----- Now Trump want to dismantle the banking regulation - to protect its financial industries.
(2) US Treasury have to borrow trillions of dollars by selling bonds to China, Japan, Saudi - to fund its massive budget deficit. --- Now Trump want to cut its tax in huge percentage, boost its spendings and balloon its debt and widen its budget deficit.
(3) US Treasury have to pump prime its Economy ---- by printing US dollars to repay its debt. ----- Now Trump think that he can do this again if US Economy go into "cyclic boom and bust" cycle --- with Trump risky policies - for immediate gratification but no regards for the future US generations.
--- Can the World not be careful and watchful on what Trump try to do --- and trigger a domino effect on the World financial system in the near future?
Like · Reply · 1m
Ricky Lim ·
"We, therefore, encourage the US to work constructively with its trading partners to resolve trade and investment disagreements without resorting to the imposition of tariff and non-tariff barriers," Lagarde said.
The fund's economists indicated Trump's focus on reducing trade deficits with specific countries was misplaced. Instead, trading partners should work on "securing more ambitious bilateral and plurilateral agreements on trade and investment."
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Posted on :- 02 Mar 2018
Ricky Lim ·
Singapore
With Trump declaring Trade War with the whole World, the whole World should attempt to create a "buffer zone" against US - by forging multi-lateral trade deals.
This is to ensure the whole World trade among themselves - and cushion any fallout from US trade protectionism.
That is - the whole World build a "Trade Firewall" against Trump led US.
The fund's economists indicated Trump's focus on reducing trade deficits with specific countries was misplaced. Instead, trading partners should work on "securing more ambitious bilateral and plurilateral agreements on trade and investment."
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Posted on :- 02 Mar 2018
Ricky Lim ·
Singapore
With Trump declaring Trade War with the whole World, the whole World should attempt to create a "buffer zone" against US - by forging multi-lateral trade deals.
This is to ensure the whole World trade among themselves - and cushion any fallout from US trade protectionism.
That is - the whole World build a "Trade Firewall" against Trump led US.
Like · Reply · 1m
Ricky Lim ·
"Unilateral trade actions can be disruptive and may even prove counter-productive," she said in her critique of the fund's largest shareholder.
And the administration's use of a rarely-applied national security justification for the tariffs - on steel, aluminium, and potentially autos - opened the door for other countries to follow suit and use that excuse to impose broad import restrictions that would "undermine the rules-based global trading system."
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Posted on :- Fri 20 Jan, 2017
Avatar
ricky l 0 seconds ago
1930s Deep Depression --- hopefully it will not occur.
It is trigger by US trade war - increase trade tariff against the World - that trigger 1930s Deep Depression.
Hope Donald Trump learned from this - and not repeat the mistake of the 1930s Deep Depression.
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"The decline in the U.S. economy was the factor that pulled down most other countries at first; then, internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade.[17] By late 1930, a steady decline in the world economy had set in, which did not reach bottom until 1933."
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ricky l
ricky l 3 seconds ago
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ricky l 1 second ago
And Deep Depression 1930s --- trigger the 2nd World War.
0
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World War II and recovery
The common view among economic historians is that the Great Depression ended with the advent of World War II. Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression, though some consider that it did not play a very large role in the recovery. It did help in reducing unemployment.[11][90][91][92] The rearmament policies leading up to World War II helped stimulate the economies of Europe in 1937–39. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 ended unemployment.[93] When the United States entered into the war in 1941, it finally eliminated the last effects from the Great Depression and brought the U.S. unemployment rate down below 10%.[94] In the U.S., massive war spending doubled economic growth rates, either masking the effects of the Depression or essentially ending the Depression. Businessmen ignored the mounting national debt and heavy new taxes, redoubling their efforts for greater output to take advantage of generous government contracts.[cit
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And the administration's use of a rarely-applied national security justification for the tariffs - on steel, aluminium, and potentially autos - opened the door for other countries to follow suit and use that excuse to impose broad import restrictions that would "undermine the rules-based global trading system."
--
Posted on :- Fri 20 Jan, 2017
Avatar
ricky l 0 seconds ago
1930s Deep Depression --- hopefully it will not occur.
It is trigger by US trade war - increase trade tariff against the World - that trigger 1930s Deep Depression.
Hope Donald Trump learned from this - and not repeat the mistake of the 1930s Deep Depression.
----
"The decline in the U.S. economy was the factor that pulled down most other countries at first; then, internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade.[17] By late 1930, a steady decline in the world economy had set in, which did not reach bottom until 1933."
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ricky l
ricky l 3 seconds ago
Avatar
ricky l 1 second ago
And Deep Depression 1930s --- trigger the 2nd World War.
0
----
World War II and recovery
The common view among economic historians is that the Great Depression ended with the advent of World War II. Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression, though some consider that it did not play a very large role in the recovery. It did help in reducing unemployment.[11][90][91][92] The rearmament policies leading up to World War II helped stimulate the economies of Europe in 1937–39. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 ended unemployment.[93] When the United States entered into the war in 1941, it finally eliminated the last effects from the Great Depression and brought the U.S. unemployment rate down below 10%.[94] In the U.S., massive war spending doubled economic growth rates, either masking the effects of the Depression or essentially ending the Depression. Businessmen ignored the mounting national debt and heavy new taxes, redoubling their efforts for greater output to take advantage of generous government contracts.[cit
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