IMF SLASHES GROWTH FORECAST: DOUBLES DOWN ON STIMULUS

The IMF today ratcheted down it’s global growth forecasts and called on European nations, to continue pouring more and more stimulus into their economies. Great call IMF. Nothing like doubling down on a rotten policy.

5 years of stimulus has managed to get the U.S. to 1.8% GDP growth( Last quarter). Talk about a lousy ROI.

According to Bloomberg, “ The forecast for global growth next year is 3.8 percent, down from 4 percent in the IMF’s April projections. In the report, the fund said advanced economies must continue to avert risks — in the U.S., by making timely increases to the debt ceiling and in Europe, by continuing a “do what it takes” approach to mitigate financial fragmentation. Monetary stimulus “should continue until the recovery is well-established,” the report states. The U.S., Japan and European Central Bank have all pursued record stimulus in an effort to boost their economies.”

And to little or no avail. Basically the IMF is saying to print money until you are bankrupt. The policy hasn’t worked anywhere; why on earth are they encouraging more and more of it?

How about preaching a policy of budgetary constraint and pro-growth policies? Wow, now isn’t that a novel approach. Scale back growth strangling regulation, cut taxes across the board and especially on investment, and most importantly, create a culture where success is applauded and not vilified. Today’s successful entrepreneurs are cast by the media as crooks and piggish capitalists, instead of being complimented as successful risk takers, and those that actually employ people.

Until we get these policy and cultural changes, look for global economic growth to continue to sputter.

Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, SIFMA. For more information, visit www.aaronkatsman.com, www.gpsinvestor.com or email aaron@lighthousecapital.co.il.