Trade imbalances and the US$

purch

Maybe we should introduce a global currency - that would eliminate all these problems over night

Or create a whole new set of problems.

Exchange Controls, Trade Barriers and a looming Trade War.........that's what will likely be the outcome.

Jobs, both keeping and creating is the battlefield.

We in the West were stupid enough to export many of ours, and we won't get them back without a fight !!!! .......... however much we allow our currencies to be devalued.

*MF*

setmefree2 wrote: »

<snip>

Maybe we should introduce a global currency - that would eliminate all these problems over night - LOL - can't see that happening in my lifetime

Maybe, maybe not ... but in a way precisely that concept may have moved one small step closer today - in the form of SDR's.

Kinda starts here - in March:

China has called for the replacement of the dollar as the main global reserve currency, in a display of its growing assertiveness ahead of the G20 summit in London.

The bold proposal from the governor of the Chinese central bank – who calls for a new system controlled by the International Monetary Fund – reflects the willingness of emerging powers to press their case as the economic crisis overturns existing relationships and highlights the failings of the current financial system.

His remarks also underline Beijing's concerns about its immense dollar reserves – thought to top $1 trillion (£681bn).

The governor suggested the international community should consider expanding the IMF's special drawing rights. SDRs, which were originally created to support the Bretton-Woods fixed exchange rate system, are a kind of reserve asset, but these days are used mainly for accounting purposes in the IMF and some other organizations.

SDRs are currently based on the value of the dollar, euro, yen and pound. But Zhou suggested that the currencies of all major economies should be included in the basket of currencies – shifting it "from a purely calculation-based system to one backed by real assets" and thus boosting confidence in its value.

Source:

http://www.guardian.co.uk/business/2009/mar/24/china-reform-international-monetary-system

And today:

The G20 on Thursday tripled the International Monetary Fund's resources, adding $500 billion for a total of $750 billion, giving it more firepower and putting it centre stage in the battle against global financial crisis. A G20 summit of developed and developing countries also agreed to support a general allocation of $250 billion worth of IMF Special Drawing Rights (SDRs) to IMF member countries to boost liquidity at a time when credit markets are frozen.

Source:

http://www!!!!bc.com/id/30015905

(Lol, again the site is affecting that link - where it uses !!!! - the letters "cn" are being ruled out - and they talk about China limiting Google - lmao!)

cocktail

spot on. SDR's would be china's way of utilising some of their vast Dollar reserves before they lose value.

Wookster

Or they will sell their reserves? I'm a bit confused here - do you think China is going to sell her dollar reserves or not? No sarcasm intended.

China has never had the need to sell reserves - over the last 15 years they have had double digit economic growth people's rise out of poverty has been meteoric. I suspect Wen is between a rock and a hard place at the moment: one one hand, to prevent social unrest, he needs to fund a massive stimulus package. On the other hand he needs to protect his gigantic reserves of US$; selling a significant chunk of US$ is going to seriously depreciate their value.

Health care, unemployment benefit, pensions, social ousing.

Well no - all the reserves China holds are dollar denominated, so to China can only use them to buy other currencies or goods sold in dollars. In the quantity they are held, those reserves are useless as the US doesn't produce things that other people in the world want (it is like the UK: it has sustained trade deficits)

setmefree2 wrote: »

Presumably - if China wasn't trying so hard to manipulate her currency, she wouldn't have such large reserves.

Agreed! The RMB needs to appreciate, but if it had done, they wouldn't have seen the meteoric growth they have seen over the last 15 years.

Wookster

purch wrote: »

The only real way that can be corrected, is by a change in consumption patterns and habits.

You mean if the US actually produces things that the rest of the world wants.

I'm not sure I see that happening in a gradual way, hence why I see a more drastic solution...

harryhound

From the Bloomberg link above, China's favourite "charities":- "Here is some of our money (on easy terms) that you can spend in our economy to try and help us mop up the 20 million put out of work by the USA inspired credit crunch".

Argentina, Belarus, Hong Kong, Indonesia, Malaysia and South Korea

The Asian neighbours are self evident "partners" in the new Chinese hegenomy.

Argentina, once one of the world's richest economies, but now a bit bombed out BUT a producer of lots of meat, grain and one of the world's largest wine producers;) [That will be handy - No more famine in China:T]

They don't trust their new found friends in Africa, (corrupt one man one vote one time only rulers?) any more than I do.
Building that railway to Rhodesia did not prove a winning investment?

What is the angle with Belarus?

I think we in this thread might have put our finger in what really happened in the [strike]smoke filled[/strike] rooms of the G20 meeting:
There will be a "Trillion" more of (SDR's ?) available from the IMF.
Perhaps some deal has been done to monetise a chunk of China's unspendable reserves giving China a power behind the throne as we would say (or behind the curtain as they would say) exercised through the IMF?

Watch this space?

There is no doubt about it China has now got the VIP seat at any future gathering of the world's major powers.

Harry.

BTW I cannot get that !!! link above to work; I've tried several combinations and what ever I do I seem to arrive at apparently unrelated web sites that upset McAfee "Site Advisor". Very strange but it was a Chinese military man who wrote the seminal manual for cyber wars. Perhaps there is a bit of game playing going on between the industrial espionage departments of USA and China?
Let us hope that the central European AVG has managed to deal with any threats aimed at my PC.

*MF*

harryhound wrote: »

<snip>

I think we in this thread might have put our finger in what really happened in the [strike]smoke filled[/strike] rooms of the G20 meeting:
There will be a "Trillion" more of (SDR's ?) available from the IMF.
Perhaps some deal has been done to monetise a chunk of China's unspendable reserves giving China a power behind the throne as we would say (or behind the curtain as they would say) exercised through the IMF?

Watch this space?

There is no doubt about it China has now got the VIP seat at any future gathering of the world's major powers.

Harry.

BTW I cannot get that !!! link above to work; I've tried several combinations and what ever I do I seem to arrive at apparently unrelated web sites that upset McAfee "Site Advisor". Very strange but it was a Chinese military man who wrote the seminal manual for cyber wars. Perhaps there is a bit of game playing going on between the industrial espionage departments of USA and China?
Let us hope that the central European AVG has managed to deal with any threats aimed at my PC.

Watch this space - indeed, indeed!

I have spoken to Admin - the have blanked any link with "cn" in it to curtail the spam we were all experiencing - much of which was China related. That imho is good and should stay - but they now know it affects other links and will monitor.

Remove the two ^ in this, and paste it in your browser:

http://www^cnbc.^com/id/30015905

harryhound

Actually this is even more interesting!!!!!!!!!!!!!!!
It illustrates what I've got running behind the scenes:

Just to check up on "The freedom railway", I've run the following Google search:

Results 1 - 5 of about 3,550,000 for railway africa built chinese. (0.23 seconds)
Search Results

<ol><li class="g">BBC NEWS | Africa | China to build Nigerian railway </div>
Safe: This page contains no active threats.
Explanation:
It is safe to proceed to this page.

Domain:

IP Address: 199.239.136.200
Owner:
   Name:
   Address:
   Country Code:

Scanned on: 04/03/09 11:11:03
(0.21 seconds to scan this page)
Ratings are provided by AVG. Site owners please contact AVG Technologies for questions.



Keep up to date with the latest AVG news and updates. Visit the AVG website. click here
Get our most complete protection against online threats. Get AVG Internet Security today. Find out how. click here

</div>
</div>')" id="XPLSS_892195534U1" src="chrome://searchshield/content/safe.gif" border="0" hspace="5">

19 Nov 2006 ... The weed-covered tracks are the remnants of a railway built by British ... And yet Development by China looks more like Africa’s future than ...
www.nytimes.com/2006/11/19/magazine/19china.html - Similar pages
<li class="g"><h3 class="r">Railways Africa - CHINESE HELP FOR VENEZUELA RAIL<a href="javascript:void(0)" id="LXPLSS_718775177U1"><li class="g" style="margin-left: 3em;"><h3 class="r">Railways Africa - CHINA TO BUILD LIBYAN RAILWAY<a href="javascript:void(0)" id="LXPLSS_484883552U1"><li class="g"><h3 class="r">allAfrica.com: Tanzania: Africa's Freedom Railway - How a Chinese ...<a href="javascript:void(0)" id="LXPLSS_1356083011U1">

harryhound

Just to check up on "The freedom railway", I've run the following Google search:

Results 1 - 5 of about 3,550,000 for railway africa built chinese. (0.23 seconds)
Search Results

1. BBC NEWS | Africa | China to build Nigerian railway
   
   31 Oct 2006 ... China is to build a railway line between Nigeria's two main commercial cities, Lagos and Kano.
   news.bbc.co.uk/2/hi/africa/6101736.stm - 43k - Cached - Similar pages
2. China’s African Adventure - New York Times
   
   19 Nov 2006 ... The weed-covered tracks are the remnants of a railway built by British ... And yet Development by China looks more like Africa’s future than ...
   www.nytimes.com/2006/11/19/magazine/19china.html - Similar pages
3. Railways Africa - CHINESE HELP FOR VENEZUELA RAIL
   
   Railways Africa - Railway industry news portal for engineers, consultants ... million in central Venezuela, to be built with Chinese technology and funding. ...
   railwaysafrica.com/index.php?option=com_content&task=view&id=3982&Itemid=36 - 20k - Cached - Similar pages
4. Railways Africa - CHINA TO BUILD LIBYAN RAILWAY
   
   30 Jun 2007 ... Railways Africa - Railway industry news portal for engineers, consultants, business, suppliers and management. Focus on rail in africa, ...
   www.railwaysafrica.com/index.php?option=com_content&task=view&id=1317 - 20k - Cached - Similar pages
   More results from www.railwaysafrica.com »
5. allAfrica.com: Tanzania: Africa's Freedom Railway - How a Chinese ...
   
   16 Mar 2009 ... Tanzania: Africa's Freedom Railway - How a Chinese Development Project Changed ... The railway, built during the height of the Cold War, ...
   allafrica.com/stories/200903161630.html - Similar pages

harryhound

*MF* wrote: »

Remove the two ^ in this, and paste it in your browser:

http://www^cnbc.^com/id/30015905

Thanks for this.
So to get to the magic "trillion" you have to throw everything into the pot, including a chunk of gold reserves?

At the moment China is only chipping in a modest amount.

What amazes me is that the Chinese (Hong Kong excepted) are still prepared to work for (say) 100 dollars a month, even when shipped to dodgy work camps all over the world.

We will have to wait and see what happens, when all the behind the scenes little international civil servants try to flesh out the head of state statements and press releases into a workable system.

Funny way to run a world of 6.7 billion citizens:
http://www.metro.co.uk/news/article.html?Berlusconi_rebuke_makes_Queen_a_YouTube_hit&in_article_id=609318&in_page_id=34

http://www.smh.com.au/world/family-photo-gets-the-thumbs-up-as-nature-calls-20090403-9lb6.html