Our Global Economy

28 02 2011

The American economy has been in flux for some time now, and is still rapidly changing. Corporations and people are both feeling the constraints of the
current economic landscape. America is currently experiencing its second recession in less than thirty years; its’ third in the last 100 years; and has never experienced cuts in worldwide budget expectations like this before.

The American dollar is not backed by the same security it once was, thus making issues related to pricing and investments very sensitive. Efficiency is now considered one of our most valuable commodities. Efficiency has made the electronic transfer of money a very common practice.
The rapid rise in electronic payment funds has been the norm in America for the past few years. Not only does this lead to less face to face and personal interaction between people, but it engenders a sense of false security and a lack of hands on knowledge about money transfer.

This situation has created an international “wait and see” approach to spending in some areas. Our American economy is on the same shaky ground as the rest of the developed world, leading monetary advisors and investors to be more apprehensive of the global future.

Dominique Strauss-Khan at the recent IMF international summit press conference noted the role of IMF in responding to the global mometary problems, pushing early on for economic stimulus, helping coordinate policies, providing financial resources, supporting the G-20 with analysis, and on IMS reform. This represented a major shift for the institution, “going from IMF 1.0 to IMF 2.0.” Now, he said, the challenge was to go further—to “IMF 3.0,” including a greater focus on financial sector issues – more generally enhancing the effectiveness of the 187-member county institution. “In an increasingly globalized world,” he said, “there is an increasing need for a multilateral institution like the IMF.”

Time will of course tell how this will all shake out, but one thing is relatively certain: the worlds’ economy will not look the same in five years as it looks today. What IMF 4.0 will look like is anyone’s guess.

World leaders must work harder (and I do believe that they are) to assure our global economy remains strong and growing. Many underpriviledged countries are in worse shape than ever, and we have never been in a weaker position to help their situations than now.

Think globally and act locally has never made more sense than it does today.


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