“Okuma Group”: Stimulus or deficit reduction divisions may widen at forthcoming G20 nations meeting.
Online PR News – 21-July-2010 – – Investment manager, “Okuma Group”, believes that growing differences between the United States and Europe on the thorny issue of fiscal stimulus are likely to widen at the forthcoming meeting of the G 20 in Toronto, Canada.
On the one hand, the United States is keen to persuade European nations to rein in the severity of their austerity measures which it believes may help to tip the global economy back into recession. In stark contrast, European nations are eager to prevent a recurrence of the debt crisis which so badly affected Greece that a bailout had to be mounted for the debt laden country.
“Okuma Group” analysts believe that little is likely to emerge from the meeting given the disparity between the various approaches.
The US stance on both monetary policy tightening and fiscal deficit reduction has changed markedly over the last three months. One of the “Okuma Group” analysts said that various commentators who had been feverishly discussing the monetary tightening options available to the US Federal Reserve were now conspicuous by their silence.
The firm believes that this is largely due to a slew of poor economic data emerging from the worlds biggest economy. Said data appears to show that the economic recovery in the United States appears to be running out of steam. In all likelihood, the Obama administration may be preparing to approach Congress and the Senate for additional stimulus funds.
“Okuma Group” suggests that the Europeans, still reeling from the savage decline in the euro and the assault on the sovereign debt of debt laden EU member states, believe they have little option but to begin withdrawing their stimulus spending through the imposition of austerity measures and this is likely to mark the beginning of a two speed Western Hemisphere.