Saturday, 14 September 2013

The IMF Needs to Cease and Desist

In many ways the current recession is as much political as it is economic. The International Monetary Fund (IMF) is largely responsible for this.

It is fairly well known that bankers have made too many questionable loans over the past decade, and that homeowners have borrowed more money than their incomes will allow repayment of. It is also increasingly accepted that central bank interest rates being held artificially low for too long enticed this bad behavior.

Unless you’ve been in a coma for the past five years, you’ve probably read of these troubles in such far off and exotic locales as Greece, Portugal, Ireland, Iceland or even, increasingly, the United States. Canadians should look a little closer to home. Canadians hold more debt than Italians, Greeks or Spaniards once all three levels of public, personal and corporate borrowing are taken into account. Canada and Portugal are the only two countries in which all three strata of debts are greater than 90 percent of GDP.

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