Economic Crisis Adds New Fears
washingtonpost.com
<< Forget about the Asian miracle, the Latin America revival, the Russian transformation, the mighty American economy and the triumph of free markets. The annual meeting this week of central bankers, finance ministers and private financiers at the International Monetary Fund and World Bank is about holding the line and forestalling global economic disaster.
"Suddenly, it all seems in jeopardy," Paul A. Volcker, former chairman of the Federal Reserve Board, said in a speech Saturday. "All that real growth -- all the trillions in paper wealth creation -- is at risk. What started as a blip on the radar screen in Thailand -- about as far away from Washington or New York as you can get -- has somehow turned into something of a financial contagion."
Rarely has an IMF and World Bank session carried such a sense of urgency and foreboding. With southeast Asia's economies in ruins, Japan's economy in stagnation and Russia's economy in chaos, the world's bankers and policymakers looked toward Brazil, the next battleground in the fight to prevent economic slowdown from spreading to the United States and Europe.
"Brazil is where we must draw the line in the sand and if we are not able to stop it in Brazil, then the dams are going to break," said Klaus Friedrich, a director of Dresdner Bank AG. "That's the mood." >>
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