Just how desperate is the American government? Desperate? Very desperate?
Very very desperate?
We already knew that the US Treasury Department was desperate from the way
that Tim Geithner, its Chief Secretary, has been sounding off at China in
recent months. Never mind that a significant proportion of China's export
surpluses with America are, in fact, the profits of American corporations
in China.
We could say that Tim Geithner is very desperate because the present
week-end meeting of international finance ministers and central bank
governors (in preparation for next month's G20 in Seoul) has already
started in South Korea with an all-night session. Never mind that the
judgement of half of the attenders must be badly affected by jet-lag,
President Obama needs to know as soon as possible. He would love to be able
to announce the deliverance of a "new world currency order" (though not a
new world currency!) in time for the Congressional elections on 2 November
as well as a "done and dusted" agreement to place before Prime Ministers at
the actual G20 meeting in Seoul on 11-12 November.
We could say that Tim Geithner is very very desperate because the US dollar
now has every sign of starting a double-dip all of its own. And once that
happens then the present "currency war" will become a currency chaos which
would make the 1930s Great Depression seem like a stroll in the park.
Needless to say, America's "solution" is also very very desperate. It wants
to put a limit of the export earnings of any one country -- supervised by
the IMF, its own special creation and friend. In fact, the solution is very
very absurd because it doesn't have a chance of being agreed by countries
such as China, India, Russia, Japan, Germany, Brazil and many other smaller
countries that are trying to hoist their economies up to American/European
standards.
The American dollar was able to dominate the currencies of the rest of the
world after the summit at Mount Washington Hotel, Bretton Woods in 1944 --
when the end of World War 2 was in sight -- because America was the only
vibrant economy in the world at that time. The European Allies were
bankrupt, Germany and Japan were destined for imminent physical, as well as
financial, destruction, China was well-nigh destroying itself in its own
internal war between the communists and the nationalists, Russia was
sending the cream of its intellectuals to the gulags, and India was
struggling to regain its independence from the British.
This time, however, America is not the predominant power in the world. No
country is. If America wants a "new world order" -- as prematurely
announced by President Bush Senior in 1991 -- then it will have to be
created by the new world in conjunction with America. Perhaps we'll know
tomorrow when Tim Geithner has had a good night's sleep -- one hopes -- and
can listen carefully to what China, Brazil and other countries have to say.
I don't suppose they'd have any objection to the dollar remaining
pre-eminent, so long as it's a stable World dollar and not a
fast-depreciating American dollar.
Keith
Keith Hudson, Saltford, England
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