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Tuesday, March 10, 2009

The Great Recession

It would appear to be official, the world is in the grip of a "great recession". That at least is the view of the IMF.

Dominique Strauss-Kahn, head of the IMF, said that the global economy could shrink for the first time since the Second World War.

He is quoted in The Times:

"The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes.

Continued deleveraging by world financial institutions, combined with a collapse in consumer and business confidence, is depressing domestic demand across the globe, while world trade is falling at an alarming rate and commodity prices have tumbled

He drove his points home by using the phrase a "great recession".

Warren Buffett, in the US, piled on the misery by referring to the situation as an "economic Pearl Harbor".

The next couple of years are going to be particularly bloody for many. Governments around the world would be well advised to start thinking outside of the box and coming up with genuine solutions, to help people weather this storm, that can be implemented in the short term without the need for the usual bureaucratic delays.

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