IMF - Focus on Stability

Finance ministers and central bankers should remain vigilant to ensure the smooth functioning of financial markets that have been jarred by a global credit crisis, the International Monetary Fund's policy-making committee said Saturday.

Policy of member governments should focus on achieving price stability while The group also said in a statement that monetary keeping a close eye on inflation in the light of rising food and oil prices, among other factors.

In an attempt to soothe jittery markets, the IMF statement urged "continued vigilance to maintain well-functioning financial markets." - AP

Many of the world's leading economists have issued dire warnings that US deficit spending is dangerous not only to its domestic economy - but may actually knock the entire global economy off kilter. Economist Hilton Root suggests that such concerns may be over inflated, if not misdirected.

The relative stability of US social and political institutions - in spite of the cavernous deficit - renders it the world's most reliable economy. Domestic debates about how best to strengthen the under-funded US social security and health care system are unlikely to create investment-deterring political instability.

Though Europe is politically stable, its overburdened state sector and slow growth make it a poor substitute for investors. And despite China's rapid growth, the lurking threat of instability deters any long-term bets on its economy. Root suggests that the United States, the soundest alternative, must carefully manage its debt: Borrowing wisely and more importantly, investing wisely, will turn its foreign investment bonanza into a foundation for long-term strength. – YaleGlobal