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G-20 Agrees To Grow Global Economy By $2 Trillion, Has No Idea How To Actually Achieve It
Apparently all it takes to kick the world out of a secular recession and back into growth mode, is for several dozen finance ministers and central bankers to sit down and sign on the dotted line, agreeing it has to be done. That is the take home message from the just concluded latest G-20 meeting in Syndey, where said leaders agreed that it is time to finally grow the world economy by 2% over the next 5 years.
The final G-20 communiqué announced its member nations would take concrete action to increase investment and employment, among other reforms. "We will develop ambitious but realistic policies with the aim to lift our collective GDP by more than 2 percent above the trajectory implied by current policies over the coming 5 years," the G20 statement said.
Australian Treasurer Joe Hockey, who hosted the meeting, sold the plan as a new day for cooperation in the G20.
"We are putting a number to it for the first time -- putting a real number to what we are trying to achieve," Hockey told a news conference. "We want to add over $2 trillion more in economic activity and tens of millions of new jobs."
And to think all it took was several dozen of politicians sitting down for 2 days in balny Syndey and agreeing. So over five years after the start of the second great depression the G-20 has finally agreed and decided it is time to grow the economy: supposedly the reason there was no such growth previously is because the G-20 never willed it...
There is only one problem: the G-20 has absolutely no idea how to actually achieve its goal of boosting global output by more than the world's eighth largest economy Russia produces in a year. Nor does it have any measures to prod and punish any laggards from this most grand of central planning schemes. From Reuters:
There was no road map on how nations intend to get there or repercussions if they never arrive. The aim was to come up with the goal now, then have each country develop an action plan and a growth strategy for delivery at a November summit of G20 leaders in Brisbane.
"Each country will bring its own plan for economic growth," said Hockey. "Each country has to do the heavy lifting."
Agreeing on any goal is a step forward for the group that has failed in the past to agree on fiscal and current account targets. And it was a sea change from recent meetings where the debate was still on where their focus should lie: on growth or budget austerity.
So who is the mastermind behind this grand plan? Why the IMF of course: "The growth plan borrows wholesale from an IMF paper prepared for the Sydney meeting, which estimated that structural reforms would raise world economic output by about 0.5 percent per year over the next five years, boosting global output by $2.25 trillion."
The same IMF whose "forecasts" can best be summarized in the following chart (which will be revised lower shortly to account for all the snow in the Northeast US):
Aside from this idiocy, the other topic under boondoggle discussion was the fate of the taper, and specifically how emerging markets will (continue to) suffer should the Fed continue to withdraw liquidity. Here, once again, the developed nations won out, leaving the EMs, and particularly India's Raghuram Rajan - who has been pleading for far more coordination between central banks in a time of globla tightening - high and dry.
- RBI'S RAJAN: POLICY TIGHTENING MUSTN'T UPSET GLOBAL ECONOMY
- RAJAN SAYS INFLATION IS HURTING GROWTH
- INDIA'S RAJAN SAYS BRINGING DOWN INFLATION BIGGEST CHALLENGE
- RAJAN: DEVELOPED, EM NATIONS AGREE ON NEED TO CALIBRATE POLICY
What inflation? As for coordination, here is what the G-20 did agree on: whatever Yellen says, goes:
Financial markets had been wary of the possibility of friction between advanced and emerging economies, but nothing suggested the meeting would cause ripples on Monday. "The text of the communiqué indicates that the standard U.S. line that what is good for the core of the world economy is good for all seems to have won out," said Huw McKay, a senior economist at Westpac, noting there was nothing that could be taken as "inflammatory" about recent volatility in markets.
There was a nod to concerns by emerging nations that the Federal Reserve consider the impact of its policy tapering, which has led to bouts of capital flight from some of the more vulnerable markets.
"All our central banks maintain their commitment that monetary policy settings will continue to be carefully calibrated and clearly communicated, in the context of ongoing exchange of information and being mindful of impacts on the global economy," the communiqué read. There was never much expectation the Fed would consider actually slowing the pace of tapering, but its emerging peers had at least hoped for more cooperation on policy.
Hockey said there had been honest discussions among members on the impact of tapering and that newly installed Fed Chair Janet Yellen was "hugely impressive" when dealing with them.
Indeed, in the three weeks that Yellen has been Chairmanwoman, she has been truly hugely impressive. It's the next three years that may be more problematic.
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The party started in the runup to the 2008 financial debacle. That's when the parasitic inbreds started retiring and going into hiding. Funny how they think they're so smart, retire and fade into obscurity, completely forgetting that the authorities protect businesses, not people. The minute they retired they became expendable to the machine. Hopefully, they'll go broke buying security out of their own pockets. lol
The pool of money the IMF loans and redistributes around the world helps to stabilize countries if they are failing or economically unstable. But many people do not understand who, and how they are funded. While the IMF exerts a fair amount of influence, it is political in nature and pushes the way the wind blows.
This bring up the issue and questions as to how muddled this system is. With a loud voice the IMF is overrated, it often uses only a small amount of money to make the very desperate march in line, at times this means not solving problems but helping to kick the can down the road. More on the overrated IMF in the post below,
http://brucewilds.blogspot.com/2013/04/imf-overrated-institution.html
As I commented in the yahoo article from reuters
"The world's top economies have embraced a goal of generating more than $2 trillion in additional output over five years while creating tens of millions of new jobs"
They going to have 2 groups, 1 to dig holes around the world and the 2nd group to go around filling them?
I havnt found a single history book that outlines how the gvt can create this sort of growth without a world war.
fzrkid, I think you just figured out the plan.
They failed to mention tha they will be growing GOLD & SILVER not the actual paper economy! LOL
Australian Treasurer Joe Hockey, who hosted the meeting, sold the plan as a new day for cooperation in the G20.
...that would be Joe "Stick" Hockey who rose to fame by graphing economics just like the warmongers...
WTF?! Central planning on a global scale now?
More regulation, taxes, and fiat money will help.
Yep. They can depreciate currencies, increase government debt, but they don't grow anything. Print? Yes. Grow? No.
Nice. What if the economy decides to grow more quickly? Will they crash it to reach the target?
G20 bureaucrats can put their money where their mouth is and forfeit their pay for the next five years - and hand that money back to taxpayers - WHERE IT FUCKING BELONGS YOU FUCKING BLOOD SUCKING ASSHOLES!!!!!!!!!!!!!!!!!
Awh why don't that bunch of worthless meat get jobs. At least I go to college for my government handout.
whist were all printing ! whats another 3 trillion bitches
whist were all printing ! whats another 2 trillion
The taper is really a cover story. QE just doesn't work as well after awhile. FED saw it coming and decided to pretend it was by design. QE won't be reinstated because it never stopped.
Ahhh, measuring growth in fiat. Hey bankers, fuck you. At least China builds empty skyscrapers.
Take 2 trillion and split it up amongst the oligarchs like last time. That worked didn't it?
They tell us they're tapering. They tell us they're printing. They tell us they're tapering, etc. WHY do we believe ANYTHING these pathilogical liars say? Of COURSE they're PRINTINGPRINTINGPRINTINGPRINTINGPRINTINGPRINTING TO INFINITY. And they didn't just bail out banks, I would bet they bailed out EVERY corporation on the planet. Why would they tell us???
I propose Greece and Cyprus do the heavy lifting. All in favor, say "aye".
Easily accomplished. INFLATION
There is a little flaw in their plan: The people who are smart enough to build a business and grow an economy aren't dumb enough to borrow money if they can't see any customers rich enough to buy their product. TPTB are gonna have to rely on lending money to idiots that don't think about how they can repay debt. They'll need a little cronyism to get the ball rolling ...
One "clever" "entrepreneur" discovered he can extract imaginary money from customers by offering four years interest free. Perhaps the next lot of "entrepreneurs" can offer five years interest free ...
Loan-sharking goes mainstream ???
What a ludicrous waste of time and money this 'summit' has been - and all to produce a nonsense growth target that none of the ass-clowns in attendance have any idea how to measure, let alone achieve.
Could have saved several millions dollars in travel and hotel expenses by holding the meeting via Skype - or just exchanging few messages via Whatsapp - with the mandatory 'LOL' at the end of each message of course.
LOL.
I got one for you......
You give me Two Trillion USD and I'll have humanity mining space within 20 years.
"It has been estimated that the mineral wealth resident in the belt of asteroids between the orbits of Mars and Jupiter would be equivalent to about 100 billion dollars for every person on Earth today." Near Earth Object Program
source: http://neo.jpl.nasa.gov/neo/resource.html
The technology is there and most of it has all ready been used.
ION drive DAWN Mission.
source: http://dawn.jpl.nasa.gov/mission/ion_prop.asp
We have robots on Mars.
All the DEBT paid in FULL. It is completely doable and the "doing" will provide needed jobs. Any person that could work at a factory building Chevy's could also build the required componants for mining, habs, fuel depots, ecct...
These fucking morons at their brain dead G-whatever gabfests still don't fucking get it.
The goddamn elephant in the room is CHINA with its monstrous $25 trillion and still growing credit bubble. A bubble that makes all previous bubbles look like a mouse fart in a bathtub.
In its peak year 2006 the US used 126 million tonnes of cement. This year it's gonna use maybe 78 million tonnes. China is using over 2000 million tonnes of cement each year. There is a lot of construction going on in the middle kingdom. Empty buildings are everywhere. Construction booms mean one thing when they end, and they all do: bad loans and an insolvent banking sector. That is China's future. And it is going to crash the entire global economy. Geddit?
Like Bonnie and Clyde, cement goes nowhere without its best buddy rebar. Rebar is made from steel. China has 200,000 steel trading companies. May that number not seem a little excessive to anyone with half a brain? It kinda explains why iron ore went from $10 a tonne in 1999 to $130 a tonne now and kick started a mining and property boom in Australia. The Brazilians made out like bandits too. Well, all that shit is coming to an end. China's financial system is stretched to breaking point. One day soon, credit is going to simply vanish in China. It's going to be one of the biggest economic collapses on record. And that will crash the rest of Asia, plus Australia and all the rest of the commodity exporters.
And there ain't nothing the finance ministers of the G20 can do about it.