[HCCN] fw: A perspective on the G20
JUDY at ROBBINSandROBBINS.com
Fri Nov 19 18:40:49 EST 2010
Friends, a good read, even if you are well versed in economics. --
Judy and Peter
If you aren't well-versed ineconomics, this short course could be
essential to understanding what's happening in the world. [Those who
read Spanish should get the original, although I've corrected a few
of the minor mis-translations - kw] The original is available at:
A Colossal Madhouse
Reflections by Comrade Fidel
This is what the G-20 meeting that started yesterday in Seoul, the
capital of the Republic of Korea, has been turned into.
Many readers, saturated with acronyms, may wonder: What is the G-20?
This is one of the many miscreations concocted by the most powerful
empire and its allies, who also created the G-7: the United States,
Japan, Germany, France, the United Kingdom, Italy and Canada. Later
on they decided to admit Russia in a club that was then called the G-8.
Afterwards they condescended to admit 5 important emerging countries:
China, India, Brazil, Mexico and South Africa. Then the group
membership increased after the inclusion of the member countries of
the OECD –another acronym-, the Organization for Economic Cooperation
and Development: Australia, the Republic of Korea and Turkey. The
group was also joined by Saudi Arabia, Argentina and Indonesia, and
they all summed up 19. The twentieth member of the G-20 was no other
than the European Union. As from this year, 2010, one country, Spain,
holds the peculiar category of "permanent guest."
Another important international high level meeting is taking place
almost simultaneously in Japan: the APEC meeting.
If patient readers bother to add to the former group the following
countries: Malaysia, Brunei, New Zealand, the Philippines, Singapore,
Thailand, Hong Kong, the Chinese province of Taiwan, Papua-New
Guinea, Chile, Peru and Vietnam -all of them with a significant trade
volume, with coasts washed by the Pacific Ocean waters- the result
would be what is called the APEC: the Asia-Pacific Economic
Cooperation Forum, and with that the entire jigsaw puzzle is
completed. They would only need a map, but a laptop could perfectly
At such international events crucial international economic and
financial issues are discussed. The International Monetary Fund and
the World Bank, with decision-making powers when it comes to
financial matters, have their own master: the United States.
It is important to remember that after the Second World War, the US
industry and agriculture remained intact; those in Western Europe
were totally destroyed, with the exceptions of Switzerland and
Sweden. The USSR had been materially devastated and scored huge
material losses that surpassed the figure of 25 million persons.
Japan was defeated, in ruins and occupied. Around 80 per cent of the
world's gold reserves were sent to the United States.
In a remote, though spacious and comfortable hotel at Bretton Woods,
a small community of the US north eastern state of New Hampshire, the
Monetary and Financial Conference of the recently created United
Nations Organization was held from July 1st to 22 of 1944.
The United States was granted the exceptional privilege of turning
its paper money into an international hard currency pegged to a gold
standard mechanism fixed at 35 US dollars per one Troy ounce of gold.
Since the overwhelming majority of countries keep their foreign
exchange reserves in the US banks -which is the same as granting a
significant loan to the richest country in the world-, the gold
pattern mechanism established at least a ceiling for the unrestricted
issuance of paper money. This was at least some sort of guarantee on
the value of the reserves that countries kept in US banks.
Based on that enormous privilege -and for as long as the issuance of
paper money was limited by the gold standard mechanism- that powerful
country continued to increase its control over the planet's wealth.
The military adventures of the United States in alliance with the
former colonial powers, particularly the United Kingdom, France,
Spain, Belgium, the Netherlands and the recently created West
Germany, led that country into other military adventures and wars
that plunged the monetary system established at Bretton Woods into a
At the time of the genocidal war in Vietnam, a country against which
the US was at the verge of using nuclear weapons, the US President
made the shameless and unilateral decision of suspending the dollar's
gold pattern. Ever since then, there have been no limits to the
issuance of paper money. That privilege was so much overused that the
value of the Troy ounce of gold went from 35 dollars to figures way
above 1 400 dollars, that is, no less than 40 times the value it kept
for 27 years until 1971, when Richard Nixon made that nefarious
The worst thing about the present economic crisis that affects the
American society today is that former anti-crisis measures applied at
different moments in the history of the US imperialist capitalist
system have not helped it now to resume its usual pace. The US is
wracked by a national debt close to 14 billion dollars -that is, as
much as the US GDP- and the fiscal deficit remains unchanged. The sky-
rocketing bank bailout loans and interest rates almost equal to zero
have hardly decreased unemployment to figures below 10 per cent. The
number of households whose houses are being foreclosed have barely
decreased either. Its gigantic defense budgets which are much higher
than those of the rest of the world - and what is worse, those
devoted to the war- have continued to grow.
The US President, who was elected hardly two years ago by one of the
traditional parties, has been dealt the biggest [midterm] defeat [in
the recent Congessional elections] in the last three fourths of a
century. Such a reaction is a combination of frustration and racism.
The US economist and writer William K. Black wrote a memorable
phrase: "The best way to rob a bank is to own one". The most
reactionary sectors in the United States are sharpening their teeth
and have appropriated an idea that would be the antithesis of the one
expressed by the Bolsheviks in October of 1917: "All power to the US
Seemingly, the US government, with its traditional anti-crisis
measures, resorted to another desperate decision: the Federal Reserve
announced it would buy 600 billion US dollars before the G-20 meeting.
On Wednesday November 10, one of the most important US news agencies
reported that "President Obama had arrived in South Korea to attend
meetings of the world's top 20 economic powers."
"Tensions over currencies and trade gaps have simmered ahead of the
summit following a decision by the U.S. to flood its sluggish economy
with $600 billion in cash that has alarmed leaders around the globe.
"Obama has defended the move by the U.S. Federal Reserve."
On November 11, the same agency reported the following:
"A strong sense of pessimism shrouded the start of an economic summit
of rich and emerging economies Thursday […] with world leaders
arriving in Seoul sharply divided over currency and trade policies.
"Established in 1999 and raised to summit level two years ago, the
G-20 has— encompassing rich nations such as Germany and the U.S. as
well as emerging giants such as China and Brazil — has become the
centerpiece of international efforts to revive the global economy and
prevent future financial meltdowns..."
"Failure in Seoul could have severe consequences. The risk is that
countries would try to keep their currencies artificially low to give
their exporters a competitive edge in global markets. That could lead
to a destructive trade war.
"Countries might throw up barriers to imports — a repeat of policies
that worsened the Great Depression.
There are countries, such as the United States, whose top priority
would be "to get China to allow its currency to; rise" against other
currencies that would allow for a reduction of the huge trading
surplus of the Asian giant with Washington, since it would make
Chinese exports more expensive and US imports cheaper.
"There are those which irate over U.S. Federal Reserve plans to pump
$600 billion of new money into the sluggish American economy". They
see this measure as a selfish move to fill markets with dollars, thus
devaluing that currency and giving US exporters and unfair price edge.
"The G-20 countries […] are finding little common ground on the most
vexing problem: What to do about a global economy that depends on
huge U.S. trade deficits with China, Germany and Japan?"
"Brazil's president, Luiz Inacio Lula da Silva, warned that the world
would go "bankrupt" if rich countries cut back on consumption and
tried to export their way to prosperity."
"`If the rich countries are not consuming and want to grow their
economies [based] on exports, the world will go bankrupt because
there would be no one to buy. Everybody would like to sell…'"
The summit started amid a rather pessimistic ambiance for Obama and
the South Korean President Li Myung-bak, "whose negotiators failed to
agree on a long-stalled free trade agreement that it was hoped could
be reached this week."
"G-20 leaders gathered Thursday evening at Seoul's grand National
Museum of Korea for the dinner that marked the official start of the
"Outside, a few thousand protesters rallied against the G-20 and the
South Korean government."
Today, Friday 12, the summit concluded with a declaration that
contained 20 items and 32 paragraphs.
Presumably, the world is not made up only by the 32 countries that
belong to the G-20 or only by those which belong to the APEC. The 187
nations that voted in favor of lifting the blockade against Cuba, as
opposed to the two that voted against and the two that abstained,
make a total of 192. For 160 of them there is no forum whatsoever
where they could express a single word about the imperial plundering
of their resources or about their urgent economic needs. In Seoul,
the United Nations does not even exist. Won't that honorable
institution say a single word about it?
In these days European news agencies have been publishing really
tragic news about Haiti – where, in only minutes, an earthquake
killed around 250 000 persons in January this year.
According to reports, the Haitian authorities have warned about the
speed with which the cholera epidemic is spreading throughout the
city of Gonaives, in the northern part of the island. The Major of
that coastal village, Pierreleus Saint-Justin, asserts he has
personally buried 31 corpses on Tuesday, and expected to bury another
"Others could be dying as we speak", he added. The report states that
as from November 5, 70 corpses have been buried only in the urban
area of Gonaives, but there are more people who have died in rural
areas nearby the city.
According to the report, the situation is becoming catastrophic in
Gonaives. The floods caused by hurricane `Tomas' could make the
situation to be even worse."
Last Wednesday, the health authorities in Haiti fixed at 643 the
number of victims who had died until November 8 in the entire country
as a result of the epidemic. The number of persons infected with the
cholera virus during the same period amounts to 9 971. Radio stations
report that the figures to be released on Friday could include more
than 700 deadly casualties.
The government asserts now that the disease is taking a serious toll
on the population of Port- au-Prince and is threatening the capital
outskirts, where more than one million people have been living in
tents since the earthquake on January 12.
News are reporting today a figure of 796 deaths and a total of 12 303
More than 3 million inhabitants are now threatened; many of them live
in tents and among the rubble left by the earthquake, without potable
The main US agency reported yesterday that the first part of the US
Fund for the Reconstruction of Haiti was already on the way now, more
than seven months after being committed to help rebuilding the
country devastated by the earthquake in January.
Reportedly, in the next few days, the agency will transfer
approximately 120 million dollars – around one tenth of the amount
promised- to the Fund for the Reconstruction of Haiti, managed by the
World Bank, as was stated by P.J.Crowley, the State Department's
An assistant of the State Department stated that the money allocated
to the Fund would be used to remove the rubble, build houses, grant
credits, support an educational reform program to be implemented by
the Inter-American Development Bank and support the Haitian
Not a single word has been said about the cholera epidemic, a disease
that for years affected many countries in South America and could
spread throughout the Caribbean and other parts of our hemisphere.
Fidel Castro Ruz
November 12, 2010
"How is the War Economy working for You?" -- Veterans for Peace
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