Unable to impose financial discipline on themselves, the government of Wisconsin decides to increase spending both tax dollars and borrowed money in hopes this unprecedented run of prosperity continues. When the rich people start to worry, however, the rest of us may want to take notice. From a pdf courtesy of the International Monetary Fund, the storm clouds on the horizon may be closer than they appear.
Assessing Risk to Global Financial Stability: Financial risks have increased and underlying conditions have worsened since the April 2007 Global Financial Stability Report (GFSR). The period ahead may be difficult, as bouts of turbulence are likely to recur and the adjustment process will take some time. Uncertainty about the final size of losses, and when and where they will be revealed, will likely continue to keep market sentiment and conditions unsettled in the near term.
Is Russia's Economy Collapsing? : Dictator Vladimir Putin announced a wave of Soviet-style price fixing. It's been announced that Russia is facing double-digit consumer price inflation for 2007, and prices may be rising at double that rate on the small basket of foodstuffs and other items that are readily affordable to the mass population, which works for an average wage of less than $4 per hour. It's quite shocking to think that G-8 member Russia needs to resort to the tactics of Zimbabwe strongman Robert Mugabe in order to stave off short-term panic, simply making price rises illegal -- as if that was a way to solve inflation that the other G-8 members never thought of.