IMF Managing Director Dominique Strauss-Kahn Calls for New Global Approaches to Post-Crisis World

Editor's Note:  Can anyone say "Problem, Reaction, Solution"?  Clearly the global elites are capitalizing on the Global Political Awakening; in large part, deliberately engineered by them, to make the people of the world beg for a New World Order in the form of a One World Government and Global Currency.  You can certainly plan on the economic crises to worsen significantly before the solution is fully implemented.


“In designing a new macroeconomic framework for a new world”, he stated, “the pendulum will swing—at least a little—from the market to the state."

IMF

In a speech entitled “Global Challenges, Global Solutions” at George Washington University in Washington, D.C. today, Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), called for a new approach to economic policymaking in the wake of the recent global crisis. He singled out three areas for improvement: a new approach to macroeconomic and financial sector policies, a new approach to social cohesion, and a new approach to cooperation and multilateralism.

Discussing the current economic situation, Mr. Strauss-Kahn noted that the global recovery is unbalanced both between and within countries, and the global outlook is still beset by uncertainty. He pointed in particular to the Middle East, noting that it is going through an “historic transformation” as “citizens are seeking greater freedom, and a fairer distribution of economic opportunities and resources”. The immediate challenge for the Middle East, he stated, was “to preserve social cohesion without undermining macroeconomic stability”.

China says G20 should monitor US Fed

Editor's Note: China wants the G20 to have the authority to "monitor" the Fed.  Since the Fed has battled an audit by our own Congress it's doubtful it will happen, but it will be interesting to see if they concede any ground to accommodate global monetary cooperation.

AFP

China's state media has issued a new broadside at the US Federal Reserve's move to prime the US economy, suggesting the Group of 20 should monitor policy shifts by the US central bank.

The Xinhua news agency said in a commentary the Fed was "risking the global recovery by following its own track for economic revival" by spending an extra $US600 billion ($A593.65 billion) buying Treasury bonds to stimulate the US economy.

The comments were published just days ahead of two key summits this week - the G20 meeting in Seoul and the Asia-Pacific Economic Co-operation forum in Yokohama, Japan - that are expected to focus on rebalancing global trade.

"There is an urgent need for the G20 ... to set up a new mechanism that effectively monitors the issuer of the international reserve currency, especially when it is not able to carry out responsible currency policies," Xinhua said.

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G20 Agreement Gives Emerging Countries More Power in IMF

Lesley Wroughton
Reuters

A G20 agreement to give emerging market countries more power in the International Monetary Fund opens the door for breakthroughs on easing global tensions over trade imbalances.

The surprise deal reached at weekend meetings of finance ministers from the Group of 20 in South Korea shifts IMF voting power to under-represented emerging countries like China, India, Brazil and Turkey.


Countries like the United States are betting that with greater representation emerging economies such as China will be more willing to address the trade distortions causing currency volatility and threatening increased protectionism.


The deal avoided a widening of the gulf between emerging and developed nations and a chaotic ending to a G20 meeting in which the United States failed to convince China and others to agree to targets to limit current account imbalances.

The IMF agreement also spares the G20 from losing credibility, opening the way for G20 heads of state, meeting in Seoul on November 11 and 12, to handle more politically difficult decisions on fixing the trade imbalance problem.

Treasury Secretary Timothy Geithner flew to China on Sunday for further talks with Chinese authorities in the hopes of finalizing a currency deal before the Seoul summit.

Youssef Boutros-Ghali, Egypt's finance minister who heads the IMF's steering policy panel, the International Monetary and Financial Committee, said problems in the world economy could not be addressed without acknowledging the rising clout of emerging economies.

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IMF Head Says Officials at G20 Agreed on "Biggest Reform Ever"

Rebecca Christie and Rainer Buergin
Bloomberg

Group of 20 nations agreed on an overhaul of the International Monetary Fund that gives a larger voice to emerging market nations, IMF Managing DirectorDominique Strauss-Kahn said.

More than 6 percent of voting rights will be reallocated to underrepresented emerging-market nations and Europe will give up two board seats in the “biggest reform ever in the governance of the institution,” Strauss-Kahn told reporters today in Gyeongju, South Korea. The G-20 also agreed on the structure for a “financial safety net” to stop nascent financial crises before they speed out of control, he said.

The IMF’s board may approve the package in the first week in November, and it will probably take a year for the changes to be put in place, Strauss-Kahn said. The package includes a shift in the composition of the IMF’s executive board and the fund’s 10 biggest shareholders.

Strauss-Kahn called the deal a “historical agreement” as the Washington-based lender takes on a larger role in monitoring the world’s economies, currencies and capital flows. South Korea, the host of this weekend’s meeting of G-20 financial chiefs, proposed the safety net.

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G20 struggles to find common ground on currency war, triggers US push for trade caps

Finance ministers from the Group of 20 nations struggled to agree on how to prevent a currency war on Friday, with the United States switching tack to focus on a way to rebalance global trade.

G20 Finance Meeting - EPA Photo

Malcom Moore
Telegraph

With China resolutely refusing to allow the yuan to rise more quickly, the US shifted the debate on the first day of the G20 summit to address trade imbalances, the root issue behind exchange rate clashes.

Timothy Geithner, the US Treasury secretary, told G20 members they should commit to specific trade caps, allowing surpluses and deficits on their current account, the broadest measure of trade in goods and services, to be no more than 4pc of gross domestic product.


China's current account surplus was 5.9pc in 2009, having almost halved from its peak of 10.6pc in 2007. The US, by contrast, had a current account deficit of 3pc last year.  In a letter to the G20, Mr Geithner called for a "co-operative effort" on the issue, but said there would have to be "some exceptions" for countries that imported large quantities of raw materials.

The US plan, a way of side-stepping a direct spat over currencies, was backed by Korea, Australia and Canada, but immediately opposed by large exporters such as Japan and Germany.

Rainer Bruederle, the German finance minister, rejected a "command economy" approach, while Yoshihiko Noda of Japan said "setting numerical targets would be unrealistic".

India also said the trade caps would be hard to work out, while Russia said there would be no numerical limits set in the summit's final statement.

Mr Geithner also called for G20 countries to refrain from "either weakening their currency or preventing the appreciation of an undervalued currency". Mr Geithner, who also called for the IMF to monitor the G20's commitments, added: "G20 advanced countries will work to ensure against excessive volatility and disorderly movement in exchange rates."

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