In a recent article in the UK Telegraph:
Dominique Strauss-Kahn, the IMF's chief, said the economic rebound across the world is built on unstable foundations, with many rich nations still strapped in job slumps while the rising powers of China, India and Brazil already facing the threat of overheating. "It is not the recovery we wanted. It is a recovery beset by tensions and strain, which could even sow the seeds of the next crisis," he said. "Global unemployment remains at record highs, with widening income inequality adding to social strains," he said, citing turmoil in North Africa as a prelude to what may happen as 400m youths join the workforce over the next decade. "We could see rising social and political instability within nations – even war," he said.
The IMF has published a paper entitled Inequality, Leverage and Crisis arguing that the extreme gap between rich and poor – with echoes of the US in the late 1920s – was an underlying cause of the Great Recession from 2008-2009. The paper, by the Fund's modelling unit, warned of "disastrous consequences" for the world economy unless workers regain their "bargaining power" against rentiers. It suggests radical changes to the tax system and debt relief for workers.
In a veiled warning to China and other countries holding down their currencies for commercial advantage, the IMF chief said "exchange-rate adjustment should not be resisted". Nor should capital controls be imposed to stop the inflow of funds.
Pointing out the obvious is fine (widening income inequality, rising social and political instability), Mr. Strauss-Kahn, but how about making amends to those that are suffering and those that will suffer these "inequalities" because of the reckless deceit and fraud that global and Central Bankers have committed for the past several decades? And calling for China and other countries to stop manipulating their currencies while granting a "get out of prison" card to the largest currency manipulator offender and destabilizing global economy influence of them all, the US Federal Reserve, is, in my opinion, neither an adequate or viable solution, or even a helpful suggestion. Stay tuned, because within the next month or so, I'll be posting my own solutions regarding how people can take the power back from immoral and fraudulent bankers, and along the way, exposing some huge banker-disseminated myths that have somehow morphed into truths today.
About the author: JS Kim is the Managing Director and Founder of SmartKnowledgeU, a fiercely independent investment research, education, and consulting firm with the mission of helping Main Street avoid and beat the fraud of Wall Street.