FROM EIR DAILY ALERT
IMF Warns that ‘A Second Great Depression’ Is Looming
Oct. 9, 2018 (EIRNS)—The International Monetary Fund just warned in its annual economic outlook that “large challenges loom for the global economy to prevent a second Great Depression.” The report was issued as part of the preparations for the IMF’s annual meeting, which will be held next week in Bali.
Speaking earlier this week, the IMF’s Managing Director Christine Lagarde also sounded the alarm, noting that the total value of global public and private debt has risen by 60% since the 2008 financial crisis. She warned that the long years of quantitative easing led to huge build-up of debt in so-called emerging markets, and that rising U.S. interest “could trigger a flight of funds and destabilize their economies,” the London Guardian reported. The daily wrote that the IMF report explained that
“the huge rise in borrowing by corporates and government at cheap interest rates had not shown up in higher levels of research and development or more general investment in infrastructure.”
Lagarde warned: “This should serve as a wake-up call.”
The Guardian added:
“With global debt levels well above those at the time of the last crash in 2008, the risk remains that unregulated parts of the financial system could trigger a global panic,”
according to the IMF.
It should be noted that neither the IMF nor the Guardian mention what is an even larger explosive charge than debt, which is the derivatives bubble—now totaling over $1.5 quadrillion, or an order of magnitude greater than the debt.
