According to the International Monetary Fund (IMF), the global financial system may be the biggest hindrance to a worldwide economic recovery. The IMF used its global financial stability report to make this announcement, one that suggests there isn't a lot of stability thanks mainly to the global financial system.

The IMF estimated that the writedowns attributed to the credit crisis were $2.2 trillion, lower than the $2.3 trillion originally projected in April.

U.S. markets sold off Tuesday amid fears of European debt defaults. On Wednesday, news that Greece's economy shrank by 1.8% in the second quarter didn't help ease those concerns.

Back in June, Greece was the center of a potential default crisis. The European Central Bank was forced to provide the member country with $140 billion in bailout funds. The bailout was orchestrated with the International Monetary Fund. Under the terms of the agreement, Greece was forced to impose austerity measures such as cutting public sector expenditures.

When the financial meltdown struck in the United States in 2008, the contagion quickly spread throughout the world, including the European Union (EU). However, unlike the Federal Reserve, which has unilateral authority to act on behalf of the United States, the EU has no such authority.

The EU barely survived 2008 and 2009. Then this year, Greece had difficulty refinancing its sovereign debt. Again, unlike the United States, where the debt came from financial institutions, in Greece the debt is government debt.

Add the International Monetary Fund to the list of nations, institutions, and officials calling for China to let its currency appreciate.

The IMF, in its revised World Economic Outlook, said an appreciation of China's currency, "appears highly desirable on its own."

The group also said a shift in China's economy away from exports and toward domestic consumption, along with structural measures to decrease savings, would be preferred, as well.

Tuesday's good news comes from the International Monetary Fund (IMF). Their latest forecast projects losses from the financial crisis to total $2.28 trillion, down $533 billion from the organization's October 2009 forecast.

And the reason for the improvement? You guessed it: the global economic recovery, which has reduced estimated bank write-downs and also improved bank capital positions, among other benefits. The IMF, in its revised Global Financial Stability Report, also cut its estimate for U.S. bank losses to $855 billion, down from a $1.03 trillion estimate in October 2009.

On Friday I sat at my desk ranting that Germany must help Greece without the International Monetary Fund. And over the weekend, the European Union finally drew up a plan to support its Greek brothers and sisters. This time, Germany is on board, bending to the ever-increasing pressure to do the right thing. However, the IMF was not left entirely out of the picture.

On April 11, the EU agreed to a Greek rescue package to subsidize Greek bonds at a 5% rate, about 20% less than current floating rates. The plan could cost 45 billion euros ($61 billion).

Germany, the European Union member with the largest and strongest economy, should get off their high horse and support Greece, not the International Monetary Fund (IMF) -- which to a large extent is the United States.

Greece is on the brink of disaster and for some reason the German government, following the sentiments of the man on the street, is willing to let the chips fall where they may. They do not seem to be able to grasp that the EU ship can only sail in one direction at a time and that half a ship will not sail at all.

Just last week I questioned why anyone would be interested in acquiring 10 year Greek bonds (Serious Money: Greek Bonds or High Yield Stocks) when there were so many alternatives. The answer is that not enough are, and that means to find a sufficient number of investors the yields are rising with continued upward pressure.

The pretend economic support of Greece by the European Union members and the International Monetary Fund (IMF), which is smoke and mirrors absent any guarantees or required concrete action, gives investors no confidence. If Greece's European partners are so concerned that Greece has the potential to falter in meeting its obligations, then why would anyone else have confidence?

The economic debate among the European Union nations about how to handle the turmoil in the Greek economy and, subsequently, the Greek bond market casts greater doubt on the value of the euro and the EU with each passing day -- and they know it!

While the economic benefits of the Union are obvious and highly valuable the turmoil has turned a giant spotlight on the problems and conflicts that exist and will continue to exist for another century or more if not solved in a way that not only works for the EU but does not diminish the Euro in the slightest way.

California has a huge deficit and will not be going to the International Monetary Fund (IMF) for financial assistance. This is true of a dozen other states as well.

The European Union, which was established to compete with the economic clout of the United States, is looking like the European Dis-Union (EDU) -- currently "dissing" on the state of Greece. This EDU is a far cry from the good 'ol USA, which has plenty of economic and social strife of its own, but even under the most stressful times has demonstrated it takes care of its own.

The head of the International Monetary Fund said China and other emerging market countries are propelling a faster-than-forecast global economic recovery.

IMF Managing Director Dominique Srauss-Kahn strongly suggested that the organization would raise its 2010 global GDP growth estimate from the 3.1% forecast in October 2009, The Associated Press reported Monday.

Europe is hot, if you don't look too far over your shoulder. The Dow Jones Stoxx 600 Index played well through the stock market recovery of 2009, ticking up 28% (60% from its March 2009 low). This was the index's best annual performance in a decade.

Basic resources and banks gained 100% and 46%, respectively, this year, after having turned in dismal performances the year before. China helped, as well, with its elevated economic growth forecast good for another 0.5% gain during the shortened week of Christmas.

First of all what is sovereign debt? Sovereign debt is created by the issuance of bonds by a country's government. When the financial meltdown occurred last year, governments around the world issued bonds to obtain money for their respective stimulus programs. The amount of debt (bonds) issued worldwide has been astronomical.

Now, investors around the world are worried that some countries are in danger of their bond markets collapsing or, worse case scenario, for the country to default on its bonds.

The gold bugs are on the loose. Today gold shot up to another new high of $1,212 per ounce. So far this year gold has risen 34%.

Investors are looking for a safe haven and are running headlong into gold. Governments around the world are buying more gold, with India buying 200 metric tons from the International Monetary Fund. The US Mint has run out of gold coins. The situation in Dubai is up in the air.

You're now free to invest in Iceland ... should you be so inclined. On Sunday, the country will begin lifting its post-financial disaster capital controls, giving investors a bit more elbow room. Foreign currency investments coming in won't be subject to the existing controls.

According to a statement released by Iceland's central bank, "Investors are authorized, without restrictions, to convert into foreign currency the sales proceeds from assets in which they invest after Nov.1." The statement also said, "Previously, non-residents were fully authorized to transfer foreign currency deriving from interest and dividends on investments in Iceland."