The global economy is in chaos.

Regular Member Posts : 7317 Join date : 2014-07-29

10-16-2022

FINANCE & TAX

The global economy is in chaos.

America is driving the West’s response to the war in Ukraine.
But U.S. officials are struggling to project a global response to a worldwide economic slowdown.

A sense of dread surrounded meetings of finance ministers and central bankers in Washington this week, amid one of the most foreboding moments for the world economy in years. The list of worries was alarmingly long:
stubbornly persistent inflation, crippling interest rates, panic around the worsening energy supply crisis, manic markets and
the spiraling of the U.K. government.

“The worst is yet to come,” IMF Managing Director Kristalina Georgieva said this week, capturing the tone that pervaded the discussions of the world’s most powerful economic officials.

The leadership gap speaks to the overriding challenge of the moment, as national leaders and central bankers across the globe focus on averting domestic crises triggered by surging inflation and shocks from Russia’s escalating war in Ukraine. The Federal Reserve is at the forefront, as it ratchets up interest rates and fuels recession risks in a bid to control rising prices.

“At the end of the day, a lot of the national policies are on their own course,” said Mark Sobel, U.S. chairman of the Official Monetary and Financial Institutions Forum and a former Treasury official.
“The Fed is going to do what the Fed is going to do, and the Europeans are going to do what they’re going to do.”

The proposals are limited in scope compared to the response to the financial crisis of 2008, for example, when U.S. officials pumped money into the global economy to counteract weakness and central banks together cut interest rates to prop up demand.

Today, the No. 1 priority for the Federal Reserve and the White House is____
controlling inflation at home —
even if it means economic pain for the rest of the world.

“That’s just the reality, and everyone recognizes that,” said Josh Lipsky, Atlantic Council GeoEconomics Center senior director and a former IMF and State Department aide. “So that’s the tension. It’s not that the Fed and the Treasury Department can come to the G20, or the IMF meetings and say, ‘We are all going to do X together in a coordinated way.’ It’s different now.”

Former Treasury Secretary Larry Summers — who warned of the current inflation surge well before the Fed intervened — on Friday blasted the International Monetary Fund and World Bank for not doing more to address the complex and cross-cutting challenges.

Nations around the world are facing strain from the surging value of the dollar, which makes their dollar-denominated debt payments more expensive and increases the cost of imports —
further feeding inflation in their economies.
Higher rates in the U.S. have also led to an exodus
of cash away from riskier foreign markets and into American ones.

Other European leaders are focused primarily on ensuring the bloc can get through this winter amid skyrocketing energy prices and a looming recession.
And in the U.K., officials are scrambling to clean up the disastrous fallout from a package of proposed tax cuts that sent tremors through global markets and led to the firing of finance minister Kwasi Kwarteng Friday.

Behind the scenes, U.S. officials are quietly working to ensure financial markets are functioning in an orderly way, despite the heightened volatility that has accompanied steep Fed rate increases. The Fed is also watching global developments closely, but much of the pain abroad is unlikely to disrupt stability in the U.S.

Meanwhile, the inflation fight is far from over.

The scope of problems that are difficult to fix is extensive. Higher food prices and supply disruptions, fed by Russia’s war in Ukraine, have led to crises in poorer nations across the globe. The number of hungry people around the world has surged to around
345 million from 282 million since the beginning of the year, the United Nations’ World Food Programme warned this week.

The coronavirus pandemic hasn’t fully subsided, and many economies are far less recovered from it than the U.S., even as they struggle to tamp down their own domestic inflation. Meanwhile, the conflict in Ukraine has made a recession in
Europe all but certain.

Although U.S. officials may not be able to prevent the spillover effects from higher interest rates in the U.S. on lower income countries, they can help mitigate the effects, said Karen Dynan, a senior fellow at the Peterson Institute for International Economics and a former Obama Treasury economist.

To that end, U.S. officials have shown strong leadership on targeted economic issues during the latest round of meetings, including nudging allies to deliver more aid to Ukraine and drawing attention to debt sustainability concerns in emerging markets, said Heidi Crebo-Rediker, adjunct senior fellow at the Council on Foreign Relations and a former State Department economist.

“I give two thumbs up, and a lot of credit where credit’s due, where the U.S. has really stepped up in this round of annual meetings,” she said.

Regular Member Posts : 7317 Join date : 2014-07-29

10-17-2022

Saudi defends oil policy in face of US charges.

audi Arabia has rejected US accusations of aligning itself with Russia amid the Ukraine war by making oil production cuts to drive up crude prices, insisting it was purely a business decision.

"We are astonished by the accusations that the kingdom is standing with Russia in its war with Ukraine," the Saudi defense minister, Prince Khaled bin Salman, tweeted late Sunday.

The Saudi-led OPEC+ cartel -- which includes Russia -- has angered Washington by deciding to cut production by two million barrels per day from November, adding further pressure on soaring
crude prices.

"It is telling that these false accusations did not come from the Ukrainian government," Prince Khaled wrote. "Although the OPEC+ decision, which was taken unanimously, was due to purely economic reasons, some accused the kingdom of standing with Russia.

"Iran is also a member of OPEC, does this mean that the kingdom is standing with Iran as well?" he asked, referring to Saudi Arabia's regional rival.

In a speech broadcast on Sunday night, Saudi King Salman bin Abdulaziz Al Saud insisted his country was "working hard, within its energy strategy, to support the stability and balance of global oil markets".

The United Arab Emirates and Bahrain, which like Saudi Arabia are US allies as well as OPEC partners, also defended the cartel's decision as a "technical" move.

White House spokesman John Kirby said last week that Riyadh knew the cut "would increase Russian revenues and blunt the effectiveness of sanctions"
on Moscow.

The United States has vowed to re-evaluate ties with the oil-rich kingdom since the cut, which was seen as a diplomatic slap in the face for President Joe Biden by hiking prices on US consumers weeks before congressional elections.

Despite vowing to make the kingdom an international "pariah" following the October 2018 murder of journalist Jamal Khashoggi, Biden travelled to Saudi Arabia in July and met with Crown Prince Mohammed bin Salman -- with the two greeting each other with a high-profile fist bump.

But with relations now strained, US National Security Advisor Jake Sullivan said Sunday that Biden has
"no plans" to meet with Prince Mohammed at an upcoming G20 summit in Indonesia.

2022 AFP

Subject: Re: The global economy is in chaos. Mon Oct 17, 2022 9:42 pm

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Subject: Re: The global economy is in chaos. Wed Oct 19, 2022 9:05 am

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I drove off without paying.

I was apprehended by the police, went to court and got fined $100.

I will be back next week with more money saving tips .

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