World Economic Woes

Austerity Fatigue Posing a Global Inflation Threat Government budget deficits ballooned in the wake of the global financial crisis that erupted in September 2008. So dire was the emergency that normal policy protocols were set aside and public money was poured into the support of banks, other financial companies, airlines, and national champions in strategic industries. The cost of entitlement programs surged as people lost their jobs and their homes. Four years on, it is proving much harder than expected to wind down this support and bring government budgets back into line. Whereas the preference of the incumbent politicians is always to defer painful adjustments to government programs or higher tax burdens, financial markets serve periodic reminders to politicians that delay is unacceptable to those who fund the budget deficit. The lack of a credible plan to normalize public finances can so easily translate into a loss of confidence in the future value of money. Fiscal inflation was rife in the 1970s and it may be making a comeback. Click here to read this special LIGNET economic analysis prepared by Peter Warburton, PhD. Dr. Warburton is Director of London-based Economic Perspectives Ltd. His clients include senior wealth managers around the world. This e-mail is never sent unsolicited. You have received this LIGNET e-mail because you subscribed to it or someone forwarded it to you. To opt out, see the links below. TO ADVERTISE For information on advertising, please contact Advertising Sales via e-mail. TO SUBSCRIBE If this e-mail has been forwarded to you and you would like to sign up, please click here. Remove your e-mail address from our list or modify your profile. We respect your right to privacy. View our policy. This e-mail was sent by: LIGNET.com PO Box 1277 Washington, DC 20013 Phone: 202-250-4287 1483186 E8D5-1