World leaders Miss Target

[don]

But what were they aiming at? Henry C K Liu on the G20 meeting

Breaking free from dollar hegemony
Dollar hegemony prevents all non-dollar economies from financing domestic development with sovereign credit denominated in their own currencies and forces them to rely on foreign capital denominated in dollars. Moreover, the exporting economies are in essence shipping real wealth created by low wages and environmental abuse to importing nations that have unearned sources for dollars.

The dollar-denominated trade surplus earned by the exporting nations cannot be spent in the domestic economy without first converting them to local currencies. But such conversion will create inflation since the wealth behind the new local currency has already been shipped to the importing nations.

Thus the exporting nations, while starved for capital, have to invest the dollars they earn from low wages and environmental abuse back into the dollar economy, enabling the importing economies to have more dollars to import more. Capital from the dollar economy is in reality debt from the exporting economies. Yet such debt will return to the lending economies as foreign capital to invest in the export sector in a vicious circle. Dollar hegemony is in essence the venue for a free transfer of wealth from the poor economies to the rich economies. This free transfer of wealth hurts workers in both the poor and rich economies by keeping wages low through cross-border wage arbitrage. Low wages then create overcapacity unsupported by adequate demand in every economy.

When buyers and sellers are located within the same country, with settlements denominated in domestic currency, even with imbalance of payments, free trade is not predatory. But when buyers are located in different countries from sellers and trade is denominated in the buyer's fiat currency due to currency hegemony, trade is predatory in favor of the buyer even if the balance of payments is in favor of the seller. Essentially this is the situation with US-China trade.

http://www.atimes.com/atimes/Global_.../KD15Dj04.html

[rjwjr]

Re: World leaders Miss Target

But what were they aiming at? Henry C K Liu on the G20 meeting

Breaking free from dollar hegemony
Dollar hegemony prevents all non-dollar economies from financing domestic development with sovereign credit denominated in their own currencies and forces them to rely on foreign capital denominated in dollars. Moreover, the exporting economies are in essence shipping real wealth created by low wages and environmental abuse to importing nations that have unearned sources for dollars.

The dollar-denominated trade surplus earned by the exporting nations cannot be spent in the domestic economy without first converting them to local currencies. But such conversion will create inflation since the wealth behind the new local currency has already been shipped to the importing nations.

Thus the exporting nations, while starved for capital, have to invest the dollars they earn from low wages and environmental abuse back into the dollar economy, enabling the importing economies to have more dollars to import more. Capital from the dollar economy is in reality debt from the exporting economies. Yet such debt will return to the lending economies as foreign capital to invest in the export sector in a vicious circle. Dollar hegemony is in essence the venue for a free transfer of wealth from the poor economies to the rich economies. This free transfer of wealth hurts workers in both the poor and rich economies by keeping wages low through cross-border wage arbitrage. Low wages then create overcapacity unsupported by adequate demand in every economy.

When buyers and sellers are located within the same country, with settlements denominated in domestic currency, even with imbalance of payments, free trade is not predatory. But when buyers are located in different countries from sellers and trade is denominated in the buyer's fiat currency due to currency hegemony, trade is predatory in favor of the buyer even if the balance of payments is in favor of the seller. Essentially this is the situation with US-China trade.

http://www.atimes.com/atimes/Global_.../KD15Dj04.html

So, reading between the lines here, it appears one topic of discussion at the G20 was most certainly a global currency, eh?

This also makes the case for protectionist measures not being such a bad strategy or outcome after all.

[rjwjr]

Re: World leaders Miss Target

From the article...

"For all economies except that of the US, whose fiat currency has the unfair and unearned advantage of being the dominant reserve currency for international trade, excessive national debt denominated in foreign fiat currency, either private or public, threatens the economic and political sovereignty of independent nations."

Unearned? This guy's getting a little pissy. As for WWII, the spoils go to the winner, baby. Where is Mr. Lui from? His country must have sat that one out.

[rjwjr]

Re: World leaders Miss Target

From the article...

"For all economies except that of the US, whose fiat currency has the unfair and unearned advantage of being the dominant reserve currency for international trade, excessive national debt denominated in foreign fiat currency, either private or public, threatens the economic and political sovereignty of independent nations."

Unearned? This guy's getting a little pissy. As for WWII, the spoils go to the winner, baby. Where is Mr. Lui from? His country must have sat that one out.

Nevermind, I found my own answer...

Henry C K Liu was born in Hong Kong and educated at Harvard University, US, in architecture and urban design. His interest in economics and international relations started when he participated in interdisciplinary work on urban and regional development as a professor at the University of California Los Angeles, Harvard and Columbia. He is currently chairman of a New York-based private investment group.

Damn pseudo-commie, American wanna-be apologist.

[don]

Re: World leaders Miss Target

His country must have sat that one out.

If you're referring to China, you may want to stick to NASCAR history and skip the world's.

[GRG55]

Re: World leaders Miss Target

So, reading between the lines here, it appears one topic of discussion at the G20 was most certainly a global currency, eh?

This also makes the case for protectionist measures not being such a bad strategy or outcome after all.

No need to read between the lines rjwjr. No secret that it was a prominent topic of discussion. The news during the G20 was filled with reports about the G20's agreement to fund SDRs. bart, for one has [in the past] posted about the likelihood that any "new reserve currency" would bear remarkable resemblance to the IMF SDRs. Here's just one Reuter's example...

IMF considers options on G20 SDR plan-spokeswoman
Thu Apr 9, 2009 7:27pm BST

WASHINGTON, April 9 (Reuters) - The International Monetary Fund is considering various options on how to issue the $250 billion in Special Drawing Rights to member countries as agreed to by the G20 in an effort to boost global liquidity, an IMF spokeswoman said on Thursday...

...The G20 agreed to a trillion-dollar boost for the IMF, including $750 billion for lending to countries hit by the financial crisis as well as an additional $250 billion issued in SDRs to boost members' foreign reserves.

Atkinson said the G20's endorsement for allocating SDRs to IMF members suggest there is a value in using SDRs to increase global liquidity.

"Whether that leads to further development of use of the SDR remains to be seen," she added. "At the moment, the SDR can be useful as a way to augment countries' reserves and as a means by countries to obtain other currencies that they may use in international transactions."...

[petertribo]

Re: World leaders Miss Target

If you're referring to China, you may want to stick to NASCAR history and skip the world's.

Here's some recent unpleasant NASCAR history (2007), offensive in the extreme to all anti-socialists and free marketers:

The latest iteration of the bill would provide at least $164 million of public financing to build a NASCAR track near Bremerton, while exempting from property taxes only 750 of the site’s 950 acres. [my bold] ISC claims sales taxes would mostly be levied on out-of-state fans, and that economic and development benefits would lead to lower property taxes on area residents… but local officials dispute these claims. And in fact, most of the these new, so-called concessions merely represent a willingness to negotiate some of the final terms with local officials, rather than having them mandated in the legislation.

Whatever. ISC can issue all the press releases it wants, but the fact remains that we’re talking about giving a huge public subsidy to an extremely profitable out-of-state corporation that wants WA to build it a new track in a relatively remote location, that would require many millions more in transportation improvements on top of the millions being sucked out of state and local coffers. [bold] To hear ISC spin it, they’re doing charity work here, and all they want from us is a matching grant. If we want a NASCAR event in Washington state — and all the prestige and tourism that supposedly comes with it — well, this is the only way they can financially swing it. Take it or leave it, Washington state.

http://horsesass.org/?p=2728

Above sounds a bit like all those Wall Street Racketeers.

[flintlock]

Re: World leaders Miss Target

If you're referring to Chi
na, you may want to stick to NASCAR history and skip the world's.

Ah come on, they only lost about 19 million dead, sounds like sitting it out to me.

In his defense, he said that BEFORE he realized the guy is from Hong Kong.

[don]

Re: World leaders Miss Target

Ah come on, they only lost about 19 million dead, sounds like sitting it out to me.

In his defense, he said that BEFORE he realized the guy is from Hong Kong.

With a name like Henry Liu, where do you think a guy with the handle NASCAR would think he might be from, Shangri-La ;)

[rjwjr]

Re: World leaders Miss Target

If you're referring to China, you may want to stick to NASCAR history and skip the world's.

At the time I made the quote I didn't know what country from which he hailed.

And I love how some of you on this site continue to equate NASCAR with ignorance. Quit stereotyping.

[rjwjr]

Re: World leaders Miss Target

With a name like Henry Liu, where do you think a guy with the handle NASCAR would think he might be from, Shangri-La ;)

Oh, sorry, didn't know Henry was a popular chinese name...lol.

I've never visited Shangri-La. Does it have a NASCAR track?

[rjwjr]

Re: World leaders Miss Target

In his defense, he said that BEFORE he realized the guy is from Hong Kong.

Thanks, flintlock, at least you didn't jump to a negative, pompous conclusion based solely on my avatar.

We NASCAR fans love cartoons also, Don. Here's one for you...



There now. I feel much better.

[The Outback Oracle]

Re: World leaders Miss Target

I thought only pommies and aussies were capable of that much irony!