Obama claims strengthened hand in global dealings

image/Reuters

David Werner
Associated Press

YOKOHAMA, Japan — President Barack Obama claimed a stronger hand on the world stage Friday despite electoral defeats at home, failure to get a free-trade agreement with South Korea and lackluster international support for his get-tough policy with China on trade and currency disputes.

"It wasn't any easier to talk about currency when I was first elected and my poll numbers were at 65 percent," Obama argued at the close of the G-20 summit, after bluntly accusing Beijing of undervaluing its currency.

The president flew to Japan for the APEC summit without the coveted trade pact with Korea or a united front with other countries against China's currency policy. He also endured a gusher of criticism from other countries about a decision by the U.S. central bank to pump $600 billion into the U.S. economy, something China, Germany and others believe could weaken the dollar and lead to inflation.

After the talks here beginning Saturday, Obama will return to the U.S. to confront Republicans empowered by their gains in this month's midterm elections.

Even so, the president contended that his standing with world leaders is not diminished.

"When I came into office people might have been interested in more photo-ops," the president said, because of the "hoopla surrounding my election."

But he contended he has now developed genuine friendships with leaders including Indian Prime Minister Manmohan Singh, German Chancellor Angela Merkel and South Korean President Lee Myung Bak – and even Chinese President Hu Jintao.

"That doesn't mean there aren't going to be differences," the president added.

Those have been on stark display throughout the G-20 summit, which resulted in a final document in which leaders agreed on various measures to achieve economic stability, none of them enforceable or specific.

Obama contended this constituted victory nonetheless, even as he acknowledged that America's place in the world has changed – and even if he wouldn't say his had.

Whereas the U.S. had been the dominant superpower, "We are now seeing a situation where a whole host of other countries are doing well and coming into their own and naturally they're going to be more assertive ... and that's a healthy thing," the president said.

Obama told a news conference here that progress was made in stabilizing and strengthening the global economy, saying it is now back on "the path of recovery." But he also said that nations "risk slipping back" into peril if they don't work harder to foster sustained growth, end unfair trade practices and currency manipulation. Obama argued that "countries with large surpluses must shift away from unhealthy dependency on exports" and said that exchange rates "must reflect economic realities."

China's currency "is undervalued," the president declared, adding that Beijing "spends enormous amounts of money" to keep the yuan in that condition. He said that it's critical for China, "in a gradual fashion," to let markets set the currency's value.

Read Full Article

Fresh food that lasts from eFoods Direct (Ad)

Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!

Print this page

The Global Monetary System in Crisis

Bob Chapman
International Forecaster

The recognition of currency war, which has been going on for years, reflects the failure of international cooperation and the failure the G-20 to find a solution of the beggar-thy-neighbor policies of almost every nation. The result has been growing geopolitical dislocation, which G-20 has yet to find a solution for. These efforts, until recently, were turned upside down by the failure of the Copenhagen Summit in the summer of 2009, when it was discovered that global warming was a giant scam. This was proof positive that global leadership was nothing less than a group of common criminals. Economic and financial failure has brought about global austerity measures, and bickering over trade and currencies as well. As this transpired the economies of the US, UK and Europe slid downward in socio-economic, crisis, which in some cases has degenerated into violent demonstrations.

The US and UK are in economic paralysis due to the major changes anticipated in next week’s elections of House and Senate delegates. The President isn’t even going to be in Washington to witness the massacre of the Democrats. He just refuses to deal with it, as a long line of bureaucratic appointees head back to Harvard, foundations, think tanks, the Council on Foreign Relations and the Trilateral Commission. This as the Chairman of the Fed unveils plan two of quantitative easing, the creation of money and credit out of thin air, which in reality has been going on in the bond market since early June. Another bit of subterfuge dreamed up on Wall Street.


The Fed is monetizing a stimulus plan that the administration is no longer capable of assisting, due to an enraged public. On the other hand, large dollar holders are loudly complaining that the Fed’s policies will cause major inflation and a falling US dollar. Of course, the flip side is if the Fed doesn’t act in this manner the US economy will collapse and with it the world economy. The dumb Chinese, Japanese and oil producers should have long ago accumulated gold and gotten rid of dollars. That was not to be as they in fact enslaved to US leadership by yields and exports. The expenditure of $5 trillion over the next two years by the Fed will only take the US economy sideways at best, and in turn take the dollar to new lower levels. All the insiders know the plan won’t work, but it will buy time, perhaps so they can have another war as a distraction, as they have done many times before in history. Even the public knows it won’t work having been alerted by information pouring out of talk radio and the Internet. The US is already in austerity. Just look at real unemployment of 22-3/4%. This is getting worse not better and that means a change in control in the House and Senate could well bring about a constraining of fiscal and monetary policy.

The US is on a path to socio-political chaos as the dollar falls and the world monetary system comes unglued. Those countries in decent monetary and fiscal condition will pull away from dealing with the US and that has already occurred with Brazil that doesn’t want inflationary dollar investments entering their country, thus, they have implemented a dollar investment tax. The US cannot return to the past. Its leadership lost that opportunity in June of 2003 when they decided to go ahead and take down the economies of the US, UK and Europe in order to force the inhabitants of these countries to accept world government. A main cog in this plan was the implementation of free trade, globalization, offshoring and outsourcing, which has cost the US in just ten years 8.5 million jobs.

There is no chance now of return as countries pull away from US and UK financial markets. These moves will protect these countries for a time, but eventually they will feel the sting of economic failure and instability as trade wars and tariffs become the norm. Washington will cease to be the world leader. The currency and trade wars have only just begun. They could not be avoided by either side. There is about to be a convergence of problems. Things that previously were not connected that will burst forth without warning. That will eventually lead to the implosion of the system.

These factors will be accompanied by social unrest, which we have just seen the beginnings of in Europe. This time of social, monetary and fiscal turmoil will last at least into 2014 before any solutions are put on the table. An easy solution is multilateral revaluation, devaluation and default. This would be very painful, but would stop the power by today’s elites in the US, UK and Europe and the unmasking of their treachery.

Throughout Europe and the US there has and will continue to be a rise in patriotic movements, which those who control governments already have labeled terrorists. These are people like us who bring truth and exposure of facts to the attention of the public.

We are currently facing a new crisis in the US in the mortgage markets and in their securities, which has been aided and abetted by a disintegrating legal system. This comes to real estate at a time when it is on life support. The states cannot be of much assistance because most of them are broke, which is another distinct problem.

The US has already abdicated its role of world leader. Even leadership from Wall Street and banking is dreadful. Worse yet there is no one to take its place, as the world lies adrift in a sea of trouble. The atmosphere is explosive because no one wants to give up anything. The financial markets will all eventually fall and the flight to gold and silver as the only real money will gain acceptance, as we predicted long ago. Americans and others have failed to see the future and they’ll pay dearly for not paying attention.

One of the interesting developments of the new currency wars is a concept that, the nations that will be the most successful, are the nations that devalue the fastest. One of the things nations miss is that the cheap currency that propels exports; also raises the costs of imports. Another fallout is others won’t want to own your currency and if you devalue a currency enough it becomes worthless, or nearly so. A good example of that was in the 1930s where only tariffs were successful. As a rule those tariffs were not steep. The threat, of course, is that nations get mad at one another and war follows.

What these nations have been doing is similar to quantitative easing, or simple fiat creation of money and credit. These actions are the antithesis of sound money.

The Forex, foreign exchange market, trades $4 trillion a day and its projected to trade $10 trillion daily in the next couple of years. Money flows are already wild to say the least. Many foreign currencies have been rising versus the dollar. Some nations such as Brazil have already instituted capital controls by putting taxes on foreign purchases of local sovereign debt. Those not into the foreign game are buying US Treasuries, gold, silver and commodities.

The FOMC and the Fed, even though they know it won’t work, are becoming more and more accommodative. You will get some idea of their plan next week. The result will be a falling dollar, which is not really monetary policy, but grasping at straws in the wind. You will find nothing of sound money here and as a result markets will ultimately not survive. Remember, we could return to the circulation of gold and silver. 76 years ago gold coins were widely circulated and silver was in everyone’s pocket just 47 years ago. It is not impossible. It could happen again over the next few years.

It was just two weeks ago that the dollar revisited 76.54 on the USDX. It had rallied over the past four months from 76.88. It is currently about 77.28. Every time it tries to rally it gets knocked down again. That is a long way from 89 where it was seven months ago. One thing is for sure, as long as we have ill-fated policies such as QE2 the dollar will continue to fall.

We also found it of interest that Bill Gross of PIMCO found the Fed has taken Charles Ponzi one-step further. He says, “Has there ever been a Ponzi scheme so brazen?” No, there has not, said Bill. When the Fed meets next Wednesday it could signify the end of a great 30-year bull market in bonds.

What should be noted is that the Fed is intent on generating another asset bubble to accommodate the sale of Treasury and Agency bonds and to give Wall Street and banking more funds to speculate with. This will renew the elitist wealth effect and in the process send the dollar lower, which in turn will increase inflation, which is already sapping consumer buying. The Wall Street gang plan to use Fed funds to jack up the market, which is already overpriced by 20%, is an act of pyromania. In addition, the average increase in 15 commodities yoy to October is 35%. Food costs are up 48% and energy 23%. Real inflation is up 7%, not the 1.6% the Fed lies about.

Visit Bob Chapman at the International Forecaster and subscribe to his brilliant newsletter.

Fresh food that lasts from eFoods Direct (Ad)

Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!

Print this page

Oil climbs as dollar sags

Associated Press

NEW YORK — Oil prices climbed on Monday as the dollar fell against the euro and other currencies. Benchmark crude rose 91 cents to $82.60 a barrel in midday trading on the New York Mercantile Exchange.

Gas pump prices were virtually unchanged from Sunday, at a national average of $2.813 for a gallon of regular. That's about two cents below a week ago and almost 15 cents higher than a year ago. Drivers in western states, North Dakota and New York are paying the most, with pump prices above $3 a gallon. The lowest prices are found across most of the South, as well as Missouri and Oklahoma.

The dollar lost ground against the euro and fell to a 15-year low against the yen. That follows what JP Morgan analysts called a "rather bland" statement from the weekend G-20 meeting that said exchange rates should be determined by markets. "This is certainly nothing new, and the reality is currencies will continue to take a back seat to domestic priorities."

Oil prices tend to rise as the dollar falls, because oil is priced in dollars and becomes more attractive to holders of foreign currencies.

The G-20's lack of a firm position on currency devaluation makes it more likely that the Fed next month will announce more action to bolster the U.S. economy, possibly buying government securities, which will inject more money into the system. That's likely to weaken the dollar further and support higher oil prices.

It's not all about the dollar. Energy consultants MF Global said in a note to investors that "steady demand for raw materials from China and India are supporting oil. Additionally, industrial strikes in France, sparked by the government's plan to raise the retirement age have shut 11 refineries cutting gasoline production."

Read Full Article

Fresh food that lasts from eFoods Direct (Ad)

Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!

Print this page

World stocks up as G-20 vows to avoid currency war

Carlo Piavano
Associated Press

LONDON — World stocks rose and the dollar slumped Monday after global finance chiefs vowed to avoid a currency war that could derail the global recovery. With no concrete guidelines to go by, however, investors are wary that this may only prove a temporary truce.

Finance ministers from the Group of 20 developed and emerging countries promised to avoid competitive devaluations – weakening a national currency to help exports and sustain economic recovery – but offered no binding targets for evening out trade imbalances.

Analysts said firmer guidelines may yet be delivered at next month's meeting of world leaders in South Korea, though sharp differences in views remain. For the time being, the weekend's promises were enough to calm investors' fears of a currency war and focus attention on the main economic event on the horizon – the Federal Reserve's expected expansion of the U.S. money supply, an attempt to boost growth that markets fear could also weaken the dollar.

Read Full Article

RELATED ARTICLE:
Will The Dollar Rebound Before Being Dissolved into Global Currency?

Fresh food that lasts from eFoods Direct (Ad)

Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!

Print this page

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.

Read Full Article

RELATED ARTICLES:
7 Mega-Cartels that Kill the Free Market and Our Sovereignty
The After-the-Fed Solutions Debate Begins: Greenbackers Vs. Goldbugs

Fresh food that lasts from eFoods Direct (Ad)

Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!

Print this page