Thursday 8 September 2011

Everything's on the table...

So we anticipate tonight's Obama-jobs-speech. Don't hold your breath and don't expect too many surprises. It's forecast to include a few tax cuts and a $300 billion jobs plan. Anything less would fall short. Even so, it's not bad but probably isn't enough. Fed Chairman Bernanke due to speak this afternoon might throw us a bone ahead of the next scheduled Federal Reserve meeting on September 20. Over in Europe markets hope against hope that Trichet will change his mind and soften his stance on monetary policy. The G7 Fin. Ministers meet over the weekend to discuss a coordinated move to reignite the global economy...

The lunatic-fringe somewhere in the bowels of UBS has us believe that Europe is on a war-footing. More precisely, any delinquent country or otherwise wishing to leave the EU faces the prospect of economic Armageddon and since the people will have nothing better to do other than apportion blame among themselves, civil war's a certainty. Guru Soros tells us that the crisis in Europe is 'worse than the crisis around the collapse of Lehman Bros'. I suppose you could add Deutsche bank's 'money-market funds are under stress..' and things look pretty grim all round.

If you listened to Bernanke at Jackson Hole you'll remember the most important bit. He applied his thoughts to the US economy. Even so, it's equally applicable globally. Paraphrased simply, Bernanke pointed out that it wasn't the function of central banks to reignite the global economy but rather the responsibility of government to implement long-term fiscal policy change. Therein lies the rub.. The 21st century enjoys a LEADERSHIP VACUUM.

Why are the world's leaders not locked-up in conference, without the prospect of deferral, to discuss a tangible, acceptable solution to resolve the systemic or structural inefficiencies in the global economy once and for all? *

The mindless criticism of the status quo by disenfranchised politicians, intellectually-diminished economists and confused traders or worse-still, yesterday's hedge-fund heroes doesn't improve your or my prospects much, not so?

* My global economic solution in tomorrow's blog

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