• Gordon Brown, former U.K. Prime Minister. • Paul Volcker, former Fed Chairman and chairman of President Obama’s Economic Advisory Board. • Economist Jeffrey Sachs, director of The Earth Institute. • Joseph E. Stiglitz, former senior vice president and chief economist for the World Bank and Nobel Prize winner in Economics. • INET Executive Director Rob Johnson, former managing director at Soros Fund Management.
A Millennium goal called for a 'currency transfer tax,' a 'tax on the rental value of land and natural resources,' a 'royalty on worldwide fossil energy projection — oil, natural gas, coal,' 'fees for the commercial use of the oceans, fees for airplane use of the skies, fees for use of the electromagnetic spectrum, fees on foreign exchange transactions, and a tax on the carbon content of fuels.'
The first reason for this is that the global financial crisis – bad as it is – is hardly the second world war. The war destroyed the established order and so the statesmen who drew up the postwar institutions had a blank piece of paper on which to doodle.
Second, there is not enough time. The original Bretton Woods conference benefited from two years of preparation, not two weeks.
Third – and rather important – the countries that are meeting in Washington this weekend disagree. The Europeans, who adore all forms of international governance, are pushing for new global regulators for the international financial system. The Americans and Chinese – more jealous of their national sovereignty – are more cautious.
(Gordon) Brown wants the IMF to become the 'global central bank,' the Fed of the world economy. No way, Brownie. Americans are not going to fund such a bank, nor cede it authority, nor abide by its dictates. We are not yet a Third World nation dependent on the IMF.
What everyone has is a massive Chinese undervaluation problem. Any exchange rate discussion that fails to start with this fact is fatuous.
In 1993, China fixed its currency, the yuan, at $1 = Y8.28.
Since then, capital and technology have poured into China. It has built up foreign exchange reserves more than ten-fold, to almost $500 billion, an expansion almost unmatched in history.
Yet the decline of the dollar in the past two years has effectively dragged down the pegged yuan another 35 percent against the major currencies — exactly the reverse of what should have happened, given China’s exporting success.
INET isn’t subtle about its aims for the conference. Johnson interviewed fellow INET board member Robert Skidelsky about 'The Need for a New Bretton Woods' in a recent video. The introductory slide to the video is subtitled: 'How currency issues and tension between the US and China are renewing calls for a global financial overhaul.' Skidelsky called for a new agreement and said in the video that the conflict between the United States and China was “at the center of any monetary deal that may be struck, that needs to be struck.
This is the heart of much of our economic catastrophe. Sovereign governments are sacrificing themselves for private banking institutions. Trillions upon trillions of taxpayer dollars, world-wide, are being transferred to banks that have destroyed themselves many times over with their Enron-style Ponzi schemes and ‘creative accounting.’ The question is, how long will people stand for it? Soon it will be too late. So far, Iceland is the ONLY country whose people have made the right choice, while Ireland and Greece have made the devastatingly wrong choice — with Portugal ready to follow suit.
