During the last weeks most think tanks, governmental agencies and departments, international organizations, universities, etc. are working hard (or should have been) to prepare the summit on November 15th.,
Which are the current positions? Basically three, or two dot five. The first one, although it has no posibility at this point, is the right wing wish, to do nothing too significant except to take funds from developing countries to fund recovery in developed ones in the hope that, somehow, it will produce developent in dveloping countries later. Again the top-down approach. The third one, although it has no posibility to win today, is to approve the road map to fix the real problems. It means not just a change in the financial order and its institutions, such as the IMF, but also to change the monetary practices and in particular the international currency. I must understand that public opinions in the West, and in particular in USA, are not ready for such announcements, specially when a new administration will come within some weeks. Politics is above economics, I accept it. Then, we will have to see more emergency summits along the next two years. In the middle, the second one. As I wrote some weeks ago, that summit will approve three strategies: 1. To set up a new financial toolkit that becomes mandatory for financial institutions of any sort since rating agencies to commercial banks. Enhancing and fixing current agreements such as Basel 2 and the Financial Stability Forum (FSF). Obviously, international monitoring institutions have to be created or empowered. As the The Peterson Institute for International Economics states (1) "The objective should be to turn the IMF into a body where national authorities agree on the outlines of what each of them will legislate. In particular, one envisages that an international agreement made in the IMF will lay down minimum standards that all countries will ensure. The actual tasks of regulation and supervision will remain national responsibilities." Now, the developed nations have to leave Wonderland and face the real world. No country will fund them any longer unless those who really own the economic means control that their funds are used properly. As as example, it means that US economic policy will not longer be allowed to use "shopping and tax cuts the official macroeconomic policy of the United States." (2) as Jeffrey Sachs writes in an article that I strongly recommend to my American friends. Although as prof. Kenneth Rogoff wrote today (3) "Without its own currency, the IMF is poorly positioned to intervene with the overwhelming force needed for lender-of-last-resort operations. In principle, the IMF could be allowed to print money (it already has its own accounting unit, the so-called Special Drawing Rights). But this is not realistic, given the lack of an adequate system for global governance.". Probably he has not received information on the proposal to subordinate the Fed to a part of the IMF and the US dollar the currency of the IMF. In any case,. this step will not be approved on November. Therefore, we will have to let that the rules approved in November fail and public opinion in the West will be ready for next steps. 2. To create an international structure that reflects the real situation of the economic and financial order. The West, in particular USA, has a huge capacity to create global problems, but is Asia which has a huge capacity to fix them. To balance the power in the IMF and other international institutions will be a second achievement. The West cannot count on blank checks any longer to fix their problems. In particular while it still shows doubts on sovereign wealth funds that is exactly where the solution will come from. 3. And finally, the obvious one. The summit itself. This gathering shows and prepares the internation public opinion for the truth. This is no longer a "Western world plus Japan". It is a multipolar world, despite what people likes or dislikes. Peace and best wishes. Xi (1) http://www.petersoninstitute.org/realtime/?p=153 (2) http://www.thebigmoney.com/articles/judgments/2008/11/05/what-obama-needs-do (3) http://search.japantimes.co.jp/cgi-bin/eo20081106a2.html --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
