Ep. 522 – IMF World Economic Outlook

The Kapital News
The Kapital News
Ep. 522 - IMF World Economic Outlook

The International Monetary Fund (IMF), released their world economic outlook (WEO), report and are predicting global GDP growth for 2021 at 5.5 percent. This is slightly higher than their previous forecast. Most of the increase is due to the optimism surrounding the release and adoption of the Covid-19 vaccines. While the report does highlight other concerns and uncertainties, the IMF is apparently giving more weight to the potential positive outcomes.

The IMF has been and remains a strong vocal advocate for a collective and coordinated global effort to adopt “stimulus” spending. Of course, from a basic mathematical approach, GDP is calculated by adding government spending, investment, consumption, and net exports. If government spending increases exponentially, which has been the case in many countries, then GDP will either rise or at least not decline as severely as it otherwise would have minus the spending measures. What this does not take into consideration, however, is that debt does not equal growth. In fact, in many countries, the added debt loads will become a net-net drag to real economic growth. The US for example is currently running a $28 trillion national debt. At current rates, this number will balloon to over $49 trillion just four years from now! Meanwhile, GDP is only expected to increase by some $3 trillion. This is a debt-to-growth ratio of 7-to-1! This is completely irrational and unsustainable, yet this is what is happening. Furthermore, most of this additional spending is taking the form of transfer payments as opposed to prudent long-term investments. This is just asking for a major inflationary event to occur – and The Kapital News would argue that it is already well underway.

Later this week, we will be discussing the Federal Reserve’s FOMC meeting and their decisions; initial jobless claims, updates to the Fed’s balance sheet, M1 and M2 money stock; and a continuation of our conversations with respect to “The Great Reset,” the IMF’s outlook, and perhaps, China’s President Xi mentioning a new cold war. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #IMF #Debt #Bailouts #Liberty #Revolution #bananarepublic #USA #EndTheFed #Jobs #Inflation #FireCongress

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