UH-OH....HERE THEY COME
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3 October 2013
IMF head warns US debt crisis threatens world economy
IMF head Christine Lagarde says it is "mission critical" that the situation is resolved
IMF managing director Christine Lagarde says failure to raise the US debt ceiling would be a far worse threat to the global economy than the current shutdown.
The shutdown is due to a budget standoff between President Barack Obama and Congress.
But a worse problem looms: the US will run out of money if there is no agreement to raise the borrowing limit.
Ms Lagarde's comments were echoed by the US Treasury.
It says a debt default could lead to a financial crisis as bad as 2008 or worse.
Mr Obama emphasised that gloomy message in a separate speech on Thursday.
"As reckless as a government shutdown is, as many people as are being hurt by a government shutdown, an economic shutdown that results from default would be dramatically worse," he said.
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A default would be unprecedented and has the potential to be catastrophic”
US Treasury report
'Mission critical'
Mr Obama and congressional leaders have been in political deadlock for days, which has had the effect of freezing non-essential US government functions.
The US government closed non-essential operations on Tuesday after Congress failed to strike a deal on a new budget.
The shutdown has left more than 700,000 employees on unpaid leave and closed national parks, tourist sites, government websites, office buildings, and more.
For US economic watchers, a widely tracked indicator - the monthly US jobs report - has been delayed due to the shutdown, it was announced on Thursday.
However, while this budget crisis rages in Washington DC, another, more dangerous, one looms in the coming weeks.
On 17 October, the US government will run out of cash to pay its bills - unless the debt ceiling is raised.
In a speech looking ahead to a decade of challenges for the world economy, Ms Lagarde said that the US government needed to fix its finances for the long term.
She said it was "mission critical" that the US agrees a new debt ceiling.
But as she has often said before, there should not be too much change in the short term because that could undermine the economic recovery.
Cautiously positive
On the prospects for the world economy in general terms Ms Lagarde was cautiously positive.
She added that, although the global economic outlook remained subdued, there were signs that growth was looking up and financial stability returning.
She said not only was the US picking up steam, but the Eurozone was too, with a growth forecast of 1% next year. Even Japan, she said, was beginning to improve - albeit all three areas needed to make policy changes.
The IMF's latest economic forecasts will be released in a few days and will give a more detailed view of global economic health and prospects....
BBC News - IMF head warns US debt crisis threatens world economy < CLICK MORE for OBAMA FAKE RANT
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check this out:
"She said not only was
the US picking up steam, but
the Eurozone was too, with a growth forecast of 1% next year. Even
Japan, she said, was beginning to improve - albeit all three areas needed to make policy changes."
this is shorthand for Marx's Trilateralism.
arga warga....trouble.