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22 Sep, 2011 04:20

‘Western prosperity fading, China facing recession’

The International Monetary Fund has issued a grave warning for the global financial outlook, the most severe since 2008. The lending giant is pessimistic over world growth, unless the US and Eurozone lawmakers act quickly.

In its Global Financial Stability Report, the IMF says the European banks are particularly weak and as many as 15 lenders could eventually fail.Patrick Young, the executive director of the investment advisory firm, DV Advisors, goes even further with grim prognoses.“We are on the verge of seeing and witnessing in our lifetime the death of the West as the prosperous economic entity,” he told RT.Ahead of the EC inspectors’ visit to Athens, Greek officials have just announced that the country is ramping up budget cuts and planning to suspend more civil servants, in order to secure vital IMF and EU cash. Without the €8-billion bailout, the country will default next month.According to Patrick Young, the Greek economy is basically “going down the drain,” and “there is nothing the Greeks can do at the moment until they have a really gruesome economic shock if they are going to maintain themselves in the euro.”“I personally doubt that they really can maintain themselves in the euro,” he added. “The truth is [that] the voters, particularly in Germany, are fed up by bailing out the Greeks.”Italy, being another major concern of the Eurozone, has just been downgraded by Standard and Poor's. The country has recently been trying to get help and cash from China, but as Patrick Young points out, this “running to China” will not help much, because the situation in China represents “one of the biggest worries,” and the country is “on the verge of recession as well.”“China has a huge asset bubble,” he said. “Its property market has gone through the roof. It has had an incredible explosion in lending in the course of the last two years to try and keep the economy growing. And I actually think that China is on the verge of a recession as well.”“If you take out the fact that China goes into recession, the United States of America is flatlining, Western Europe’s basically headed back into recession – this is not good for the world economy. And that’s essentially what the IMF has been saying today,” Patrick Young concluded.