Monday, February 9, 2009

Summary of the World Economic Forum

* Davos consensus is for no growth at all in the world economy in 2009
* Without fixing the over-leveraged banks and the over-indebted consumer, any stimulus will be limited in its impact
* The Prime Ministers of Russia and China were there, and essentially said "it's the US's fault"
* At the same time, the entire world is looking at the US to fix the problem
* The question is "Is there a limit on the amount of US debt that the world will buy?"
* China is currently spending $500 billion on stimulus - without that stimulus China is expected to have a zero growth rate. China needs 8% growth each year to absorb newly created workers into its economy.

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