World Job Crisis is a Threat to Democracy, Says IMF Head (Larry Elliott)

International Monetary Fund meeting dominated by fears that US job crisis will add to currency tensions with China

Oct. 10, 2010 -- WASHINGTON (The Guardian) -- The International Monetary Fund was seeking to defuse growing tensions over global currencies yesterday amid fears that the United States will respond to its stubbornly high unemployment figures by slapping tariffs on Chinese goods.

With China refusing to bow to pressure from the United States and Europe to revalue its currency, the annual meeting of the IMF was dominated by concerns that Washington is on the point of losing patience with Beijing. Finance ministers and central bank governors gathered in a gloomy mood, expecting no quick fix to the problem -- despite a warning from the IMF that failure to tackle the global jobs crisis could threaten democracy.

Latest figures for the American labour market, released on Friday, showed 95,000 jobs were shed in September, adding to the problems of the Obama administration ahead of next month's mid-term elections.

The poor outlook for jobs in the United States has alarmed the Federal Reserve, which is expected to announce a fresh wave of quantitative easing next month, and added extra spice to the row between Washington and Beijing.

READ MORE: Information Clearing House