G20 leaders agree to allocate $5 Trillion....

Saturday, April 4, 2009

Well, as I mentioned earlier in one of my blog that I am not an economist. In yestarday news paper I saw that the leaders who met in London on Thursday agreed to allocate $5 trillion by the end of 2010 to resolve the global economic crisis, with one-fifth of the funds going to the International Monetary Fund and other financial institutions.

Will it bring back "boom time"?

I am still not sure, how just pumping money would bring prosperity to the world. No doubt when you pump in money into the financial system, as more money is available at disposal, credit availability become easier, the bank would start lending it to business, there is going to be employment, when there is employment the purchasing power increases. But will this, not once again rise inflation? Not only inflation happen, this would start creating a 'bubble' to be burst again at some point of time.

So as long as the 'new' printed money is available its 'boom' times and once it is spread out to various corners of the world or probably stacked at 'Swiss' bank over the period of time, the recession set it...

Ideally, why not G20 or G7 ask the Swiss bank to disclose the names of the account holders along with the amount held in these accounts, I am sure this itself would be a substantial undisclosed amount which is parked safely.

Any different thoughts?

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