'World needs new reserve currency'

Nobel Prize winning economist Joseph Stiglitz

Source: Press TV
http://www.presstv.ir/detail/174296.html

A prominent American economist says the world needs a new global reserve currency to avert trade imbalances that are reflected in the US national debt.

In an interview with Bloomberg on Sunday, Nobel Prize winning economist Joseph Stiglitz said that a “global system” is needed to replace the dollar as a reserve currency and help avoid a weakening of US credit quality.

“By taking off the burden of any single country, we don't have to have trade deficits,” the Columbia University professor pointed out.

“Things would be much worse if it were not the case that Europe was having even more of a problem, but winning a negative beauty pageant is not the way to create a strong economy.”

“The likelihood of the US government failing to honor its financial obligations and in particular make due and full payments on US Treasury securities is extremely low,” according to the international Fitch Ratings agency.

Americans appear to be growing nervous, and that unease could take an economic toll.

Consumer sentiment fell in March to its lowest level since November 2009. With oil prices rising, Americans' confidence in the economic recovery has taken a sudden plunge.

The financial and psychological strains appear to be encouraging Americans to cut back. Already, one in every three consumers has cut spending due to rising prices.

G20 seeks indicator deal in Paris

Finance ministers and central bank heads meet in France to decide common indicators to measure nations' economic health.


Sarkozy, whose country heads the G20 this year, has told ministers to put national concerns aside [EPA]

Source: Al Jazeera
http://english.aljazeera.net/news/europe/2011/02/201121982516550310.html

Members of the G20 are striving to reach a deal on a set of indicators to measure the economic health of member states, in a bid to avoid another global financial crisis.

The G20 has been seeking to avoid another major financial crisis by increasing economic co-operation between member states, but in order to do so it is essential the countries agree on a set of economic metrics.

Finance ministers and central bankers from the 20 developed and developing countries are holding a second day of talks in Paris on Saturday to try to finalise the details of any agreement.

In welcoming remarks on Friday, Nicolas Sarkozy, the French president, warned participants that they would have to put national interests aside for the greater good of the group.

"The temptation to give priority to national interests is great. But let me tell you clearly - that would be the death of the G20," said Sarkozy.

A diplomatic source told the AFP news agency that no agreement emerged during a working dinner for finance ministers on Friday.

The source said that China remained reluctant to agree to certain indicators that were under consideration, and there was no united front among emerging economies on the issue.

However, speaking on Saturday, Wolfgang Schaeuble, the German finance minister, said there was a "good chance" of breaking the current deadlock on the indicators.

He also said that Germany would back French proposals to work on increasing transparency in commodity markets and for implementing a controversial financial transaction tax.

Four indicators

France says that it wants an agreement as soon as possible so that the International Monetary Fund can make policy recommendations in the second half of the year.

"We need a thermometer that works so we can examine the imbalances in all their aspects to make as useful a diagnosis as possible," said one negotiator.

A series of four indicators are under discussion. Two measure imbalances within countries: the public deficit and debt, plus the level of private savings.

The other two measure external imbalances: the current account balance or trade balance, or foreign currency reserves or real exchange rates.

Sarkozy, whose country holds the G20 presidency this year, has vowed to reform the world monetary system and commodities market.

He said that he aims to defend poorer countries from trade and currency turbulence.

Some member states, including France, have also also discussed the option of curbing the dollar's supremacy as the world reference currency.

The US delegation, however, has said that it wants to focus on the effect of volatility in capital flows between countries

Wars to go on until US economy busts

Senior fellow of the Nation Institute, Chris Hedges

Source: Press TV
http://www.presstv.ir/detail/161041.html


The economy-damaging US wars are thought to continue as long as giant American corporations supporting Washington politicians profit from them.

The US economy “will fail because we're paying for it through debt, through borrowing,” a senior fellow at the Nation Institute, Chris Hedges, said in an interview with Press TV on Wednesday.

"The continuation of these conflicts is good for their bottom-line. That's why we're seeing very little reticence on the part of the government which knows how drastic the situation is in Afghanistan to pull back because the people who hold the ultimate power in the United States, which are corporations, want these wars to continue," Hedges continued.

“There are huge corporations whose profits have swollen four by four," Hedges went on to say, also referring to the unwinnable situation of the Afghan war, as covered by popular US news sources such as the New York Times.

In regards to the Iraq war, he mentioned US President Barack Obama's tactical but unpromising words that “he would withdraw the combat troops from Iraq,” only when was there acknowledgement of occupation troops' stay in the war-torn country for years to come.

According to official statistics, 48,000 American troops are currently based in war-wrecked Iraq as a result of which about 4.7 million Iraqis have been displaced.

The United States' invasion of Iraq took place in 2003, without the authorization of the United Nations Security Council, under the pretext that Iraq owns weapons of mass destruction. Later George W. Bush, the then US president, admitted that no such weapons were found there and said he was 'sorry' for those who died in the war.

It is estimated that over 1,300,000 Iraqi civilians have been killed during the war in Iraq. Though combat operations have officially ended, about 50,000 US troops will remain in the war-ravaged country until the end of 2011 to "advise Iraqi forces and protect US interests."

There are currently about 97,000 US troops in Afghanistan. Statistics reveal that there have been over 34,000 Afghan civilian deaths and 1,445 US fatalities since the start of the war in Afghanistan in 2003.

President Obama had previously promised that US forces would begin withdrawing from Afghanistan in July 2011. At the Lisbon Summit though, an agreement was merely reached to start the withdrawal in 2014.

China economic growth worries US

China 's President Hu Jin Tao is to visit US President Barack Obama next week

Source: Press TV
http://www.presstv.ir/detail/159765.html


The United States has expressed concern over China's economic policies and called on the Chinese government to distance itself from an export-based economic growth.

The US wants a “real demonstrative commitment” from China to accelerate the rise of its currency, yuan, and to shift the focus of its economy from the outside to the inside, and thus increase domestic demand and rebalance the economy, Reuters quoted a US official as saying on Tuesday.

"It's both the pace in which they do it and the conviction with which they demonstrate they're going to do it," the senior Obama administration official went on to say.

Currency strategists maintain that China is gradually giving up the firm grip and the control of trading in order to internationalize yuan and this strategy is essential for easing the capital control and the reform of foreign exchange.

China, however, has blamed the United States for the trade gap and the imbalances and has called on Washington to take action to resolve its fiscal house problem to prevent the world economy from further instability.

The remarks come just days ahead of Chinese President Hu Jin Tao's official visit to the United States during which economic as well as military issues will be the highlight of the negotiations.

US dollar 'unstable' reserve currency

French President Nicolas Sarkozy has visited his US counterpart Barack Obama, discussing several issues including the reduction of the influence of the US dollar.


As France is hosting G8 and the G20 this year, the Monday meeting was focused on reforming the world economy and preventing another global recession, particularly on the US dollar.

Sarkozy considered the current model which uses the US dollar as the primary reserve currency as "unstable" and stressed that it "makes part of the world dependent on American monetary policy."

However, Sarkozy assured Obama that France still considers the dollar as the number one global currency reserve.

Obama echoed Sarkozy's concern for serious monetary reforms, saying that he and his French counterpart are negotiating the exact reforms needed to be put before the world's industrialized and emerging nations at the upcoming G8 and G20 meetings.

Both leaders pledged to cooperate and coordinate what they called new ideas about reorganizing the world economy.

After meeting in private for two hours, the two leaders invited the press into the Oval Office for comments.

Obama said he and Sarkozy -- the most pro-American French President in years - were slated to hold talks on Afghanistan, Iran, Ivory Coast, Sudan, the Middle East and Lebanon.