Bad omens | Economy | THE COUNTRY

Bad omens | Economy | THE COUNTRY

The question, for the economic observers worried about an early detection of a new financial crisis, is this: the growth of the world debt, the rise of the prices of the oil until remaining to live in the environment of 80 dollars per barrel, the rise in interest rates of the Federal Reserve as an inevitable incentive for the euro to follow this path and the blowing up of international trade that is perpetrating Donald Trump are sufficient factors to trigger a global recession? An elementary prudence demands to declare that it is ready to predict evils. After all, economic crises are unequal constructions, even from the same causal pattern.

The International Monetary Fund (IMF) has a different vision, perhaps because it is obliged to detect and draw attention to risks. Those mentioned are enough to be alert; If we also add political instability, the economic weakness of emerging countries and factors as destabilizing as Brexit, the concern of Christine Lagarde and her team seems well justified. There is no objection to the IMF's forecast of a slowdown in the global economy. The conceptual starting point of the Fund is that large convulsions have small principles; The crises begin with a slight deceleration and may be prolonged in a stagnation.

Moderation in diagnoses is consistent with signaling disturbing signs. The fall of Wall Street is not only a reaction against the accelerated rise in rates, as is somewhat childish Donald Trump, nor a manifestation of alarm over the trade war with China, although the blunder weighs heavily in the minds of investors. There is a fundamental reluctance to the economic policy mechanism that Trump has launched. In short: pro-cyclical fiscal policy inevitably leads to a rise in interest rates, whether or not Jerome Powell, president of the Federal Reserve; because when the expansive effects of the tax reduction and investment plans are exhausted, the Fed will have to have a margin of maneuver for monetary policy. Fanning the flames of the American economic boiler, which is what the president does, accelerates the likelihood of a recession. Wall Street intermittently vents this hypothesis.

The Fund does not enter into a decisive question. As much as momentary or political causes are sought, the fact is that the markets have not made the opportune reforms that were "essential" when the crisis erupted. Speculative practices have returned to the inertia prior to 2008, the real estate activity recovers upward pressure on prices, financial regulation, when it is not deficient, it is conspicuous by its absence and, finally, the national economies remain unsolved, in many cases , the risks that threaten its financial stability.

On Wall Street you can confirm that financial practices are so similar to those that caused the second great depression. Regarding stability, we have an example of how the minimum requirements for adjusting the deficit and debt have been avoided. Seven years of painful spending cuts have not managed to reduce the structural deficit by a single tenth of GDP; The correction of the deficit has been achieved simply by improving the cycle. During these seven years, the public debt has grown steadily, so that a hypothetical seizure in the markets would destroy employment in Spain and slow down growth.


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