Friday, August 5, 2011

How can I deal with these economic scenarios?

The FED has to increase interest rate to curb high inflation first.The money supply has to be reduced substantially. The government has to perform the principle of austerity,discipline and commitment. It has to be declared transparently about the debts, budget deficit,the financing alternatives to the public. Given your data, there are still be able to use two variables as a motor of growth,including domestic consumption, and exports.It should devalue the exchange rate as soon as possible to increase export. It has to stimulate consumers' confidence and look for close cooperation. Transparency will help a lot.The government will not try to increase debts,but cut spending. But the pain must be avoid,not to reduce unemployment benefits,Medicare and Medicaid.

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