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Will we ever see the $1.1 trillion rescue package?

To a fanfare of trumpets and applause Gordon Brown was able to announce a $1.1 trillion rescue package funded by G20 members yesterday. However, just 24 hours after the decision was announced we have the Russian government backing down and refusing to contribute amid suggestions that some of the money within the $1.1 trillion package is a rehash of earlier promises. Is the worldwide population yet again the victim of a professional spin campaign?

There is no doubt that former G20 summits have often ended in significant fanfare with very little action after the event. Even though stock markets around the world were more than happy to see the announcement of a $1.1 billion rescue package released, in hindsight there are doubts. The increase in IMF funding from $250 billion to a maximum of $750 billion does not necessarily mean the extra $500 billion will be used. However, when you consider this $500 billion is a significant chunk of the overall package, we start to see potential holes appearing.

The truth is that while the Russians have already stepped aside, unable or unwilling to fund their portion, the UK economy is not exactly booming to say the least. The UK government has pushed UK national debt towards record limits, began a strategy of quantitative easing and basically bet the bank upon a recovery in the UK economy. It would be interesting to actually see how much the UK government does contribute to the overall scheme.

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