|The communiqué of the meeting made clear the G20 no longer thought expansionary fiscal policy was sustainable or effective in fostering recovery because investors were no longer confident about some countries’ public finances. |
“Those countries with serious fiscal challenges need to accelerate the pace of consolidation,” it said. “We welcome the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal frameworks and institutions.”
As I have been predicting for months, with fiscal support now totally abandoned as a means to sustain output, global economic activity is going to collapse. We WILL see the lows of 2009 revisted and unemployment in the U.S. may climb to 15% or more! Be prepared, it's going to get VERY ugly.