Blog Post 3

IMF: World Economy will Contract in 2009

http://www.cnbc.com/id/29618247/site/14081545/for/cnbc/

Late on Monday, the International Monetary Fun warned against the slowing global growth.  This slowing of growth has started over the past few years, as is expected this year to actually drop below zero and start to contract.  The IMF also said that this is probably the world’s worst depression that we have seen in any of our life times.  Decreasing consumer and business confidence, as well as a drastic decrease in international trade has caused this.  This is one of the first times ever that not only is the global economy in a recession, but also every single country is expected to be in a recession.  All of this information posses the question of whether the standard of living will rise for the next generation?

 

IMF Says Bad Loans Stall Global Growth

http://www.forbes.com/2009/01/28/imf-economic-growth-markets-equity-0128_markets40.html

This article digs a little deeper into the predictions made by the IMF.  First, it says that advanced countries will be hit the hardest from this depression.  Explaining, that since people have gotten used to living off credit, they will have to not only clear debt, but also get used to buying with cash.  Emerging markets, are also going to take a big upset in growth.  Since the consumers are demanding fewer goods, economic trade between countries is being lessened.  The IMF’s Blanchard, blamed the US for this crisis, saying that it is not doing enough to relieve banks of the bad loans they have accumulated.

 

Plumbing the Depths

http://www.economist.com/world/international/displaystory.cfm?story_id=12725914

After the surging price of oil last year, the debate has recently turned to the huge decrease in the price of oil.  Now below $50 a barrel, oil producers are trying to cut down production 1.5 million barrels a day.  This cut is not happening fast enough however, because economies around the world are demanding so much less.  America, for example, is using 5% less oil than last year.  This is causing huge decreases in income for OPEC.  The oil producing countries are aiming for $75 a barrel, which many assume is reasonable, but the struggle comes from every country do there share, and in doing so losing there share.