As a comment on one occasion one of the founders of Bretton Woods, Harry Dexter White, currency wars are the most destructive form of economic warfare. The economic war ultimately lead to armed warfare.

The world is approaching its first “global biennium lost”, resulting in growth and development is devastating, and political term is ending.

Whatever the outcome of the measures actually promises so far from the peaks of G-20 or any other “G”, at this point seems unlikely in the short run such measures may moderate the impact of the crisis on the economy real.

It also seems unlikely that enough of a political declaration to stem a crisis that no one even knows how it progresses.

If we note that mortgage-backed securities are just one segment of asset-backed securities (which include, among others, securities backed by personal loans, consumer loans, accounts receivable, credit cards, loans to purchase vehicles), all of which are based on the last step in the demand and consumption, we’ll just sit around waiting for the next wave of crisis, when people stop paying the fees of their cars, or cards credit, limit your spending, do not take credit of any kind, or just save instead of buying.

If we further consider that the pension funds, investment funds, private or sovereign, and multilateral financial agencies themselves, are part of its investment in these asset-backed securities, and that large corporations have secured their loans to these assets and other structured finance instruments, no one is certain about the “toxicity” of these assets, we conclude that the real magnitude of the crisis is unknown.

The crisis is two years of their arrival on scene, and since then made worse.

Once, as the stories say, a global financial crisis, resulting from a dangerous combination: speculation and greed, openly and actively promoting the opening of capital markets to foreign banks and innovative financial instruments, and lack of control and regulation .

It does not seem difficult to find culprits banking and private financial institutions, with the complicity of credit rating agencies, multilateral lending agencies, active promoters of the opening of capital markets and structured finance instruments, and finally governments, which decide the exclusive, first, how they invest their sovereign wealth funds, and other regulations and internal controls.

The billions of dollars poured into the banking bailouts successive highlight the magnitude of the problem in industrialized countries. The forum chosen to seek a collaboration, the G-20, suggests that we are faced with the inability of the leaders of major countries to respond more closed in forums such as the G-5 or G-8, or simply, under a cost sharing strategy for when you feel the greatest overall impact. Developing countries and economies in transition, many of which have neither art nor part in the crisis nor the settlement, will pay sins of others with more poor and unemployed, and borrowing again, in exchange for promises of greater participation in decision-making to take place, if they materialize, between 2010 and 2011. Developing countries of the Americas, there are two signals to consider: Brazil will put up U.S. $ 10,000 billion to recapitalize the IMF, Mexico, by contrast, apply for a credit line of the body of U.S. $ 47,000 million. A third sign is the lack of a regional political forum to act as a block stronger than in isolation to try to avoid painful consequences and get something in return for pay outside costs. China, meanwhile, is the third largest economy, has emerged as an actor in the decision claiming a place in the table pair girl, and in return agrees to make more resources to revive the global economy, while maintaining its new strategy facto commercial leadership, through agreements and bilateral and regional swaps. In the last three months, the Asian giant has entered into swaps for more than U.S. $ 100,000 million, entered as a member in the Interamerican Development Bank and led the call for reform of IMF conditionality and the redistribution of voting power in the body (its voting power in the Fund is only 3.67%, while the U.S. is 16.83%). Industrialized countries, rather, blame the U.S. for the crisis, while he argues that the American consumer can not be the only engine of growth, and the latter swept the world during the recent upward cycle. If this crisis but there are many shared responsibilities and blame. This is the most predictable crisis in recent history. There were too many warnings that this growth was unsustainable. Envelope also warnings of the storm was coming. But, as noted by Charles Prince, Chairman and CEO of Citigroup, told a reporter in early 2007 “while the music sound had to keep dancing.” This is as true for the private and public sector. However, at this point the causes of the crisis care less, in any case only to avoid in the future. And even on the latter is far from certain since it refers to design new rules and institutions that reduce systemic risks, “without imposing unnecessary burdens or stifle innovation.” At this point, in London, the urgency was to stop the fall. Meanwhile, on the crisis has mounted an economic and monetary debate, almost a currency war. Some world leaders speak of a new economic order and other advance a new multipolar world order.

Since early March, the route to the London summit marked by obstacles appeared insurmountable. Particularly in terms of immediate action: the U.S. position, which called for a large fiscal stimulus and rejected the idea of ??creating a super-regulator and the European Union refused to inject public money into the economy and stressed only on greater regulation and oversight and international. On the road appeared other debates, not less, as China’s role in the decision table, emergency funds of some emerging economies and developing countries, tax havens and the reform of multilateral lending agencies. And some surprises, as the document of the governor of the Bank of China, proposing the creation of a new supermoneda reserve, which could be the Special Drawing Right (SDR). The proposal was immediately backed by Russia, which had already made a similar request, considered legitimate by the IMF, and driven rapidly by Nobel laureate Joseph Stiglitz, who from his United Nations Commission anticipates that it could be underway in just 12 months . The other surprise, perhaps more, is that everyone agrees to revive the multilateral lending agencies, IMF and World Bank, who have been discredited a decade-long, after so many failures in preventing and resolving crises, episodes of corruption and questionable results in terms of development, and also, as mentioned, are part of the problem. The G-20 leaders have agreed to increase resources to fight fire in emerging economies and developing countries and so far promised a change in the conditionality and voting power. The magnitude of the increase indicates the severity of impacts. Serious reform of multilateral development banks will continue to monitor. Meanwhile several countries began a competitive devaluation of exchange rates and many others took a lot of protectionist measures. By 30 March, the scenario was one of those in which everyone loses. President Obama reached the summit down the tone of the differences. He acknowledged that the measures proposed are expensive and the taxpayers claim certainty about the fate of that money. Who fear that governments continue putting money into rescuing banks, which hold responsible for this catastrophe, without consequences for the solution of specific problems. He also maintained that the United States could not alone, that was not there looking guilty but solutions, and people expected a strong showing concerted efforts. Do not fail to mention, however, that countries could not expect to increase their export earnings on the voracity of U.S. consumption. Finally he said he hoped to reach a common position. Was not only with British support against the German-French axis in the fight between fiscal stimulus and more regulation, but other countries such as BRIC (Brazil, Russia, India and China), for example, shared his position to promote demand and consumption to boost trade and economy. The die was cast: the worst that could happen in London was that of all things worse. Among racks of primary importance, and finally arrived, for fear of a compromise.

In granting each side something of what the other asked, recognized shared responsibilities. In that sense the U.S. won the game: it is not the only culprit, and only part of the solution. But, as a mere compromise, it’s just temporary. A respite in times of emergency. Clearly, however, that from the steps that have been agreed, no immediate way, in the morning immediately there are only two possible outcomes: that whether or not the starting point to reverse global disaster. It is also clear that in either of those two scenarios are to be disputed areas of power, again, in another new world order. Since World War II went through the Cold War bipolar order of domination, with the fall of the Berlin Wall came a unipolar order, led by the United States as global power, and until recently still insisted that globalization lead to the creation of supranational institutions, military, economic and political, a sort of world government. Now seems to appear a multipolar world in which even then contained three sections: the Anglo-Saxon of Germany and Russia + France and China and its Asian neighbors. Each pole seems willing to fight for their space and we assume again to drag the smaller countries, which at best can only choose where to align. Let’s review a bit what was brewing this new agenda and what were posing the main actors in this turbulent time. The following is a selected collection of documents at least have been published in the mainstream media. Separated in time and space seem more in a news briefing glut and together they deal announced future combat. September 26 (2008) The highest authorities of the United States blamed Germany for the financial crisis.

“The United States, and let me emphasize this, the United States is the only one to blame for the financial crisis … not Europe, nor the Federal Republic of Germany.” German Finance Minister also predicted that “the world will never be as it was before the crisis, the financial system will become multipolar. Wall Street will never be what it was.” February 6 A trade war between China and the United States will worsen the global crisis. Growing concern in the international community about a possible trade war between U.S. and China at a time when the world desperately needs a concerted effort to tackle the global financial crisis. The Secretary of the Treasury of the United States, Tim Geithner, accused China of manipulating the yuan.

China said it would not tolerate U.S. intervention in the process of decision-making on the exchange rate. March 10 Stiglitz calls for a comprehensive solution to the crisis. “The United Nations is the only institution that can promote the necessary measures.” We need a fresh start. “March 12 Measures taken by Switzerland to ignite the spark of a currency war. The Swiss National Bank intervened on Thursday on the market changes to devalue the Swiss franc, this is the first time a major central bank intervenes in this regard, since Japan did the same in 2004 to devalue the yen. “This bill is the beginning of wars money,” said Chris Turner , ING Financial Markets. Countries around the world, faced with the problem of zero interest rates, can be considered acceptable to intervene to devalue their currencies in order to facilitate monetary conditions, he said, adding that other export-dependent economies, like Japan, they are probably “the head of the queue.”

Possibility Related Posts:

• The International Financial Crisis
  The concern, uncertainty and confusion is already installed in all areas related to financial and economic world. The strong cohesion between global markets means that a crisis in any part of the plan...
• Global financial crisis
  Russian President Dmitry Medvedev , blamed the United States directly to the financial crisis shaking the global economy, which could be the "most serious" since the Great Depression of 1929. "Indeed,...
• The current financial crisis cause negative social effects
  The global economic crisis that started in real estate in the United States, and subsequently created a domino effect, managed to bring down companies, markets, and had it placed in adverse circumstan...
• Speaking about the current financial crisis
  We believe that once again the facts are very seriously affecting the global economy do not support the views of economists and analysts worldwide, and as it? that of the rulers who advocate and pract...