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Global Economy Starting to Show Cracks

By Brandon Moseley
Alabama Political Reporter

The last four days have seen lots of troubling economic news.  On Thursday, July 2, new job numbers are out showing that unemployment has decreased to 2008 levels. Normally this would be good news but much of the improvement is actually attributable to people dropping out of the work force. The number of Americans who are actually working dropped by 432,000.

US Representative Bradley Byrne said in a statement, “Today’s job numbers are not a good sign. Too many people are leaving the labor force and giving up on looking for work. Even worse, wages are rising at a rate too low to help workers get ahead. President Obama’s regulatory actions, along with Obamacare, are depressing our economy and hurting young Americans the most.”

All of that is overshadowed in the financial community by concerns over Greece. On Tuesday June 30, the Director of Communications at the International Monetary Fund (IMF), Gerry Rice made a written statement regarding Greece’s financial obligations to the IMF that are now past due: “I confirm that the SDR 1.2 billion repayment (about EUR 1.5 billion) due by Greece to the IMF today has not been received. We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared.”

Director Rice said, “I can also confirm that the IMF received a request today from the Greek authorities for an extension of Greece’s repayment obligation that fell due today, which will go to the IMF’s Executive Board in due course.”

IMF Managing Director Christine Lagarde said on Monday, June 28, “I have briefed the IMF Executive Board on the inconclusive outcome of recent discussions on Greece in Brussels. I shared my disappointment and underscored our commitment to continue to engage with the Greek authorities.

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Ms. Lagarde said, “The coming days will clearly be important. I welcome the statements of the Eurogroup and the European Central Bank to make full use of all available instruments to preserve the integrity and stability of the euro area. These statements underscore that the euro area today is in a strong position to respond to developments in a timely and effective manner, as needed.”

Lagarde promised, “The IMF also will continue to carefully monitor developments in Greece and other countries in the vicinity and stands ready to provide assistance as needed. I continue to believe that a balanced approach is required to help restore economic stability and growth in Greece, with appropriate structural and fiscal reforms supported by appropriate financing and debt sustainability measures. The IMF is prepared to continue to pursue that approach with the Greek authorities and our European partners.”

Closer to home, Puerto Rican Governor Alejandro García Padilla announced on Monday, June 28 that the island territory is insolvent and will not pay back its $72 billion in debt. Not on time and in full, in any case.

The US territory has watched wages stagnate, the work force decline, people move away at an alarming rate.

 

Brandon Moseley is a former reporter at the Alabama Political Reporter.

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