As to the slight divergence between the US and the IMF, I guess that the Obama administration may be off script, or that generally confusion reigns, neither knows how to react and so don't have a unified message at the moment. Which is I think paraphrasing what you said.

Who knows though, it's a diversion from the main thrust of what can be discerned at the moment. (Thanks to you, in my case).

Ianu.

The IMF is always, constitutionally in favour of cuts. They are also usually on the same page as the US. So, could it be that the IMF doesn't really like Obama? Possible. Doesn't seem like a good explanation of much though.

I think the reason things don't make logical sense is because the IMF and the US along with other leaders don't themselves quite know what they think or want. Maybe there is just no clear logic out there.

The IMF doesn't like massive deficits and debts normally. But it is willing to be part of a Greek bail out and to issue its own debts to fund it.

The IMF doesn't mind bailing out banks and the debts that entails. AS LONG AS, at the same time cuts/austerity measures are made to public spending. The IMF have always regarded spending on public and poor as a sign of weakness.

So, where does this leave us mere mortals? Well I think the US and the IMF are peeved at Euro style bank regulations and bank taxes, and bans on short selling. They are angry that Europe is taking a lead in cost cutting that exposes the US as lagging behind. Fine if we all do it together at a pace dictated by Washington. NOT fine if Germany sets a pace Washington doesn't like.

How's that? Are we getting anywhere?

I feel that somewhere in what we've written there is an important kernal of truth even if we haven't quite got it clear yet. What do you think?

I did a *very quick* search for IMF pronouncments for the UK outlook and what we should be doing, but could only find eurozone pronouncments, which (if there are no UK specific prescriptions) would back up what you're saying. Maybe the IMF are being willfully misinterpreted by our fine leaders to scare us into acquiesence.

Hope that makes something approaching sense..

I think it's an intersting question. My own take on it is that the IMF is foaming about other people, the people it ot its master choses, adopting austerity. What neither the IMF nor Washington expexted or wanted was for people other than those they had chosen, to decide they too would go for austerity.

Greece and Portugal – people that wouldn't get an invitation to dinner basically, they should have IMF directed austerity. 'Oneself', naturally, and others one relies on for trade and votes should not have austerity.

That they have not stuck to the Washington plan an gone 'off-piste' is just too, too rude.

A potentially daft question..but aren't there differencies showing between US and IMF strategies, i.e. US – keep toking on the cash pipe, IMF – foaming mouthed austerity.

Is that right and if so, why would there be divergance from master to mouthpiece?

If I am wrong or over simplistic in the assumptions, well I caveated that with the opening words!

Thanks,
Ianu.

Seriously though, unless Wall Street burns all the IOUs and derivatives thereof, there seems little hope for our friendly nuclear neighbour.

10 trillion dollars! One needs to re-invent what money is to pay a debt of this magnitude, but the banks have already tried that. Haven't they?