IMF double speak at Davos as Lagarde says 2017 economy should be good, but there are factors that could lead to volatility

It seems like all central bankers have two things in common… they cannot under any circumstances tell the truth, and they cannot state their analysis in plain terms.

For years the U.S. central bank has gotten away with this type of obfuscation, saying that the economy is both good and bad at the exact same time.  So perhaps it is of no surprise that another of the world’s main central bankers at the World Economic Forum this week took her own page from the Fed and laid out that 2017 will have both a good outlook, and disruptions and volatility.

“If the disruptions we are expecting for 2017 as a result of what happened in 2016 prove to be all negative and we are to end up in a race to the bottom on the tax front, on the trade front, on the financial regulation front, then that for me would be a really big ‘black swan’, that would have devastating effects,” the IMF’s Lagarde said.

The global economy, however, looks solid, and the overall situation is gradually improving as the consequences of the disastrous global financial meltdown of 2008 gradually fade, the IMF observed. Still, the economic policies of the Trump administration, which are seen as rather benefitting the US economy and labour market, might cause harm to some of the export-dependent emerging markets. – Sputnik News

2016 was the year in which central bank credibility appeared to have hit rock bottom, especially with Fed President Janet Yellen promising multiple rate hikes for the year, and ending up doing just one shortly after the election of Donald Trump.  And the same can be said for the IMF’s Christine Lagarde, who cited the Brexit event along with the Trump presidency as the potential catalysts for adverse effects in the global economy in 2017 while ignoring the fact that both Italian and German banks teeter on the precipice of insolvency.

Image result for imf fail

The fact of the matter is, all central banks are both ignorant and impotent in being prepared to deal with any serious financial event occurring within the global financial system.  And all one has to do is read up on the main topics discussed this past week in Davos, Switzerland, where the very bankers who never saw the Trump and Brexit phenomenons coming are asking the question on how they can deal with a populist revolt that is already in full swing.

Kenneth Schortgen Jr is a writer for The Daily Economist,, and Viral Liberty, and hosts the popular youtube podcast on Mondays, Wednesdays and Fridays. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.

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