The World Economy and its failure to fight the CRISES “MONSTER”

Today the governments like the Russian one and USA, which have together pumped in their economies over 90 billion $, are using “cheap money” as the Angela Merkel , the Chancellor of Germany said. She criticized greatly, USA and other countries, pumping in those “cheap money”,

which would result the repetition of the same mistakes and eventually again the same crises, as we are faced with today. In already five years, according to The Financial Times, we will be faced already again with the same „monster“. In addition, one may suggest that this tendency is right in the face of world economy, it seems, as one may suggest that this is the only policy among (fiscal and monetary ones), which will bring the crises to the end! In order to stabilize and stimulate the current economical situation of the UE, it was decided to inject 200 billion Euro. However financial analytics, as well as some politicians are sceptical about if all the EU countries would agree with the plan, or would not give their support.

US Economic Bailout Progress: A real progress or a failed attempt.

There were supporters as well as critics of the bailout package today. The House Financial Services Committee held a hearing to examine how the stabilization Act of 2008 is being implemented, as well as what progress has been made. Henry Paulson (Treasury Secretary) stresses out that the bulk of the U.S. banking industry is healthy" and outlined the steps the Federal Deposit Insurance Corp. is taking to strengthen small banks and to minimize foreclosures. ". In addition he mentioned that the package is “about restoring confidence”. However consumer spending fell, economic situation is not yet even getting close to be stable, and one of the problems, as I have mentioned before is confidence, what cant be bought in the short run through injection of money (e.g. Russia 6 bn $ and the currency still devaluated). There are also other watchers of the market, like Economist Alan Blinder, who was less optimistic and noted that the way in which the money were allocated in what he says is "sharp deviation from congressional intent."