The populist policy of the USA and the trade war with China is of concern to the globalizers. IMF Chief Lagarde to Fix a clear message for US President Trump: “don’t destroy.”
In a significant rebuff to the economic policy of U.S. President Donald Trump IMF Chief Christine Lagarde, opened the annual meeting of the International monetary Fund and the world Bank. The System of global trade should not be destroyed, she said at the opening of the meeting on Thursday in Nusa Dua (Indonesia).
On the island of Bali, more than 30,000 representatives of the international financial elite come together until Saturday. Among other things, also the Federal government is expected to Finance Minister Olaf Scholz (SPD), who consults with his counterparts of the G20.
The need for reform of the Hand, their addition to MTA
Lagarde acknowledged a need for reform of the trading system under the umbrella of the world trade organization (WTO), as the day before, whose President, Roberto Azevêdo. Your claim: “Repaired it, but not destroyed it.” The rules of world trade have used all Nations.
World Bank President Jim Yong Kim had earlier declared that the world needed “more trade, not less”. The globalisation have led millions of people out of poverty. This development must continue. Lagarde went Trump, too, in his criticism of the US Central Bank the Federal Reserve in the Parade. Trump had said that the US Central Bank had become due to their rapid increases in interest rates “crazy”. Lagarde said Central Bank chief Jerome Powell and his Board seem very solid and serious. “I wouldn’t take him with madness,” said Lagarde, the US channel CNBC.
“Interest rate decisions in accordance with economic indicators,”
The IMF Boss had already emphasized previously, Central banks should take their interest rate decisions according to economic indicators. If the growth is strong and unemployment is extremely low, you would have to make “the decisions you make” said the former French Finance Minister.
The Federal Reserve has increased this year, already three Times the benchmark interest rate in the United States, a fourth step appears likely. Trump feared, obviously, before the congressional elections, that the Boom in the US economy could be slowed down by this. On Wednesday it was a significant price fall on the US stock exchanges. Trump speaks during the election campaign always from stock exchange records during his presidency.
Emerging countries are suffering
The strong Dollar and rising interest rates in the United States, however, are a Problem for the world economy. The IMF fears about capital outflows from developing and emerging countries. In addition, in US-dollars recorded liabilities for these States and companies could be very expensive.
The Fund criticises the least because of the high debt. With 182 trillion dollars, public and private households around the world in the Cretaceous, reached a record level – 60 percent more than before the financial crisis in 2007.
Problem of hedging of the financial markets
The IMF had already taken on Tuesday in its world economic report the growth forecast for the global economy. While still in April with a growth of 3.9 percent for the years 2018 and 2019 had been expected, was taken back by this assessment is now at 3.7 percent. “The economy is strong, but she is not strong enough,” said Lagarde. For Germany, the Fund looks even a correction of 0.9 percentage points in 2018, to just 1.9 percent.
The regulation of the financial markets is not yet complete, which is why there is also a Problem of security. “We are safer, but we are not sure enough,” said Lagarde, with a view to a comparison with the Situation prior to the financial crisis ten years ago. “Any small change in wind direction can result in capital outflows.”
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more New economic crisis? The Top 7 Risks1. High Debt
The private man knows that In good times, lay back to the crisis. However, since 2008 the total debt of the world increased by 60 percent. 182 trillion (182.000.000.000.000) $ is missing in the public and private funds worldwide. Where do there come from money as a buffer for the downturn?
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more New economic crisis? The Top 7 Risks2. Emerging countries
You are, after all, 40 percent of global economic output and are vulnerable. Many emerging countries to boost their spending with foreign money, mostly dollars. However, the System falters when US interest rates rise. Because then investors would rather put their money in the United States. Argentina is the first victim. Turkey could follow.
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more New economic crisis? The Top 7 Risks3. US economy
The world’s largest nation keeps Donald Trump the economy with Tax giveaways and trade barriers on an artificial Boom-rate. Many companies throw the money in the uncertain world trading situation but prefer to invest instead. The IMF expects that by 2018, the growth peak has been reached, from now on it goes downhill.
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more New economic crisis? The Top 7 Risks4. Trade conflict
Meat and vegetables from the USA; steel, textiles, technology from China. Products for 360 billion dollars to prove the brawlers with duties. According to the IMF, this is bad for the USA (-0.9 per cent economic power) and China (-0.6 percent). The dispute escalated all suffer: 17.5 per cent less in world trade would be the result, estimates that the world trade organization.
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more New economic crisis? The Top 7 Risks5. Risk banks
“Shadow banks” to handle finances outside of the regular (regulated) banking sector. According to the ECB chief, Mario Draghi, they form 40 percent of the financial system in the EU alone. Even many of the regular banks to small financial buffer for a crisis. And the party mood is back ten years after the crisis, with risk loans for the company on several occasions over the debt.
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more New economic crisis? The Top 7 Risks6. Hard Brexit
Running out of time, but still there is no common Plan for the end of the EU-membership of the British at the 29.03.2019. Without a free trade agreement alone, German companies would have to pay about three billion euros per year in customs duties. Border controls are endangering the “just-in-time”production. Car manufacturers such as Nissan, Toyota, and BMW will want to close their factories on the island.
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more New economic crisis? The Top 7 Risks7. Italy
Euro crisis reloaded? The populists in Rome, want to send their citizens formerly in the pension and unemployment an unconditional basic income figures. Italy is, after Greece, the debt-to-master of Europe, with more than 2.2 trillion Euro in debt. Greece just left the Euro bailout and is trying to rid its banks of bad loans.
ul/hb (dpa)