IMF warned of the risk of a global crash, due to one of 5 possible factors. full story

Excerpts about the falling US dollar and recommendations by the IMF

“David Bloom, a global economist, said the US would slow sharply next year, prompting investors to pull out of their massive gambles on US assets that so far had succeeded in offsetting record trade deficits. “Once these assets stop performing well and the dollar drifts lower, the dollar and asset cycle can turn more vicious. Once one does not want to buy an asset because of the fall in the dollar then the dollar starts to impact back on assets.”….Its keynote world economic outlook published tomorrow will undoubtedly reiterate that the US must cut its deficits, China must liberalise its financial system and allow its currency to appreciate, the oil-rich countries should invest their windfall for growth while Europe should do more to boost its sluggish growth rates.

A fall in the dollar would also add to the inflation in the US as import costs rose. Inflationary pressures have been rising thanks to soaring energy costs.”