I've found the G20 meetings to be pretty good telegraphers of what TPTB want. For what it's worth:
G20--cut deficits.
ME: What? The Keynesians are turning a 180 now? We cannot pull sales forward forever? Something odd is going on here.
World Bank--Cutting deficits will hinder recovery short run, but help a few years out.
ME: Timing coincidence? World Bank must see enough aggregate demand returning to muddle through the mess. Developing nations are expected to add about $2.25 trillion to world GDP this year.
IMF--Ten Commandments for Unbusting Your Sovereign Balance Sheet. 1. Plan 2. Gradually reduce deficit. 3. Long term reduction 4. Target social transfers to induce growth 5. Pension and healthcare are broke. Fix it. 6. Equitable Fairness Everybody's Equal. 7. As always, grow the debt away. 8. New institution watchdogs 9. Coordinate monetary and fiscal policy 10. Coordinate with world.
http://blog-imfdirect.imf.org/2010/06/2 ... economies/
ME: 3. Reduce debt so you can ramp up more socialism the next time everything hits the fan. 4. Socialism. Give nothing to those who are working and everything to those who are not. 5. Break all your promises to old ladies in the US, and socialize your healthcare a.s.a.p. so that you can break that promise sooner too. 6. More fairness, feel good equitable transferring. 7. Inflate as much as possible. 8. Do everything possible to take the American vote away. Create new institutions that are not subject to voters. We like those better. They're eas to pull under our influence. 9. Have congress make a deal with the Fed. Tighten spending but keep monetary policy loose. That'll send more bailout money to the banks! Don't forget, they love ya! 10. Forget about state sovereignty. World Federalists are the way to go.
China: OK, we'll toss you a token 3% adjustment.
ME: We're not going to stop our severe protectionism, but really want you to shut up. So here you go, a meaningless up to 3% adjustment.
Europe: The party is over. Let's extend and pretend until banks are recapitalized.
ME: Wake up Euro! The only way out is default. The sooner the better.
All taken together, it looks like TPTB think the chosen banks are recapitalized enough to make it through. There's enough growth elsewhere, and China has decided to release their citizens from destitute conditions a little by creating something of an internal economy. But they don't want to do much. Neither do the large Western mercantilist nations either. The rest of the world has had enough, but don't want to hear the Smoot-Hawley screams. So they'll cut debt and force the surplus nations to start playing fair or risk worldwide pain. Everyone is not equal, so most US living standards need to go down while some are subsidized even more. Consumption needs to go to China, etc., and we'll all have equitable sharing some day. Let's work towards less US sovereignty by creating more independent agencies that aren't subject to voters, and by coordinating policies with each other.
I know many of you will read this and say "No kidding. What's new." However, I find it a good 1-2 year road map of what to expect as they undulate back and forth in a creeping manner.
