[HCCN] fw: A perspective on the G20

Judith Robbins 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:  
www.cubadebate.cu .

  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  
provide that.

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  
crisis.

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  
decision.

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  
extreme right."

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  
two-day event."

"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  
15.

"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  
persons infected.

More than 3 million inhabitants are now threatened; many of them live  
in tents and among the rubble left by the earthquake, without potable  
water.

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  
speaker.

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  
government budget.

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
8:49 p.m.


"How is the War Economy working for You?" -- Veterans for Peace




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