Global Depression Just a Dodge? – IMF or G20 – Power Shift

Global Depression Just a Dodge?

The Daily Bell – by Staff Report


Strauss-Kahn / T. Geithner

Does the IMF matter any more? … Following what the IMF managing director Dominique Strauss-Kahn (left with US Treasury Secretary, Timothy Geithner) called the ‘biggest ever shift of influence in favour of emerging market and developing economies’ in the history of the IMF, the response of developing countries to the IMF’s decision to rework country quotas should have been euphoric. However, they have hardly expressed much delight. … The IMF is probably no longer as important in global financial matters as it was earlier. Developments after the latest financial crisis has put the G20 in a far more commanding position as far as taking important decisions in global economic matters is concerned. Indeed, IMF reforms have also been largely dictated by the G20. The IMF is at a stage in its existence where it has to accept the fact that G20 will call the shots in deciding the future course of action in global finance as well as on currency and exchange rates. With the G20 accommodating concerns of emerging market and developing economies more generously, the IMF stands a good chance of becoming increasingly irrelevant in emerging market and developing country calculations. – Energy Bulletin

Dominant Social Theme: The world is moving at breakneck speed as things fall apart. Chaos looms. Institutions are pitted against one another. And order? Will it re-emerge. We yearn for order …

Free-Market Analysis: Yesterday we commented on the coming Chinese economic implosion (either slowly or quickly) due to out-of-control inflation but ran into the predictable (feedback) perspective that China will be the next towering power in the world. This viewpoint will doubtless be buttressed by the recently announced yuan-ruble swap, and certainly that is a sizable development, though not surprising given the various currency arrangements that have already been worked out by the Chinese and previous announcements that the Russian/Chinese deal was in-the-works.