Larry Kudlow Has a Fit as Obama the “Declinist” Opens His Mouth in Japan; Says Obama is “Not His President”

~~By  InsightAnalytical-GRL

Well, Larry Kudlow over at CNBC is already having fits about Obama’s first statement since his arrival in Asia. You can see Kudlow flip out in this video.

On the Friday night  Kudlow Report (11/13/2009),  Larry bellowed that Obama was “not his President.”

I had to laugh.  I’ve never called Obama “President” either, in real life or on this blog.  Which just continues my tradition, since I never attached the word “President” to George W. Bush, either.  However, arch-conservative Kudlow apparently thought Bush was peachy keen at the time having no problem refrerring to Bush as President.

Kudlow ranted about how Obama does not do “optimism” and, in fact, preaches “declinism.”  And he cheerleaded about U.S. exceptionalism and our huge economy then railed about how Obama doesn’t understand how oversimplified it is to say that “the American consumer won’t bail out” the world economy.

Here’s the article from the Wall Street Journal that flipped out Kudlow:

Obama Carries a Message to Asia

Trade-Talk Revival a Goal, but World Economy Can’t Rely Solely on U.S. Consumers

(snip)

Mr. Obama’s emphasis on pursuing new pacts comes as he makes his way through an export-dependent region that has grown nervous about his trade policy, and skeptical about his willingness to use political capital at home to support free trade. He has yet to achieve tangible advances on the trade front, nor did he offer specific proposals Saturday beyond a promise to complete the next global round of free talks — dubbed Doha — “in a timely fashion.” So far, his most dramatic moves on trade have involved slapping tariffs on Chinese tire imports and, just last week, steel pipes. In his speech, he said his administration will “pursue pragmatic cooperation with China on issues of mutual concern.”

The speech in the vast Suntory Hall here Saturday morning had a somewhat different tone than many of Mr. Obama’s foreign-policy addresses. He has spent much of his first year in office working toward burnishing what he has called his nation’s diminished stature in the globe. While he also talked of multilateral cooperation and human rights, he came to Asia to deliver the message that the rapidly growing export-driven economies can no longer count on the U.S. consumer to keep them afloat.

Doesn’t this sound sort of arrogant?  I have to wonder what “consumer” Obama’s talking about.  They seem to be half-dead here. I’m sure the Chinese know that, too. They are not dumb, Barack.

Panel member Zachary Karabell of  Rivertwice Research, who has written a book on something related to all this, played both sides of the fence…he sort of believes that we’re not the biggie we used to be (which is the sort of thing that pushes Kudlow’s buttons) but he says there’s a moment at hand now where we have to continue to make sure that we remain a hub of innovation.  He made sure he agreed with Kudlow that a “dual hub” situation is occurring–U.S. & China–which is OK with both of the because they see this as being “very beneficial.”  But Kudlow is totally pissed about how we’re wrecking other economies because of the weak dollar, which is creating an inflationary bubble in Asia region. Basically,  he says Obama is ignoring all this because he’s too preoccupied with “bashing” the American consumer.

Andrew Busch of BMO Capital Markets said he thinks the Administration’s strategy, which he doesn’t like, is to go “hat in hand” to China to try convince China to help us by letting the yuan appreciate…That is where the INSISTING part I discussed in my previous post is supposed to come in, I guess.

Stephen Moore of the Wall Street Journal editorial board sees this weak dollar situation is what set up the Bush Administration to go down as a failure in terms of economic policy and that’s what we’ve got now.  How encouraging!

Ah, but Kudlow and Karabell think that American companies like Nike and Walmart making stuff in China and selling it here is great (but I’m asking, what about American jobs HERE, Larry!).

Kudlow made some dreamy comments about “stabilization” and “currency cooperation” and “coordination” with Asia. And then, Karabell dropped the bomb about an Asian ‘unified currency bloc to facilitate strength.”   And he said that if we want China to continue to “hitch” themselves to us more, we’re not supposed to freak out if China wants to buy businesses HERE and not have a “knee-jerk xenophobic response.”  Kudlow even decided there should be FUSION.  Later, he also espoused an Asian currency zone a la the Euro.  Kudlow also opined that Karabell should get a Nobel Prize for his book.

Karabell and Busch both think that China WILL  revalue the yuan by 5% with other countries in the region to follow.  Busch pointed out that China could face World Trade Organization actions for protectionism if they don’t.   As for Obama, during the presidential campaign Obama promised to “crack down on China” but during the primaries there was chatter: “But his commitment to that point of view was thrown into doubt during the primaries when a Canadian official said an Obama adviser had privately characterized his tough stance on the North American Free Trade Agreement as political posturing.” (As an example, see: U.S. to Impose Tariff on Tires From China, Wall Street Journal, September 12, 2009.  Detractors figure that “the tariff won’t result in more jobs. Tires will simply come in from other low-cost countries, they say, and U.S. manufacturers, keep making their cheaper tires in China.”) Of course, this is classic Obama…all that “get-tough” talk and “insisting” while we have to go “hat in hand” to China…more blowing smoke.

I have no idea what a 5% revaluation really means in the long run but I doubt it will miraculously revive our exports and restore many American jobs that have left the country.

All I know is that Kudlow finished the segment by again repeating that he likes his Presidents to be “optimists” and not “declinists” and that he was furious about Obama’s first utterances in Asia.  It’s worth checking out the video because I can’t due full justice to everthing that was discussed.

But what’s all this about “FUSION”? Well, it’s that “free-trade” stuff again. Kudlow seems to talk about U.S. economic leadership but embraces all this business leading to globalization.

Kudlow and  Obama both can give you whiplash…

But at least I hear Michelle and the girls are having a good time…

Globalization/U.S. Decline Right on Schedule Courtesy Obama Backdown…Summer 2010 Projected Completion of Integration of NAFTA with EU to Counter BRIC/ASEAN Bloc

~~By InsightAnalytical-GRL

A couple of days ago I posted some thoughts on “Globalization in Pictures: Courtesy AT & T”.

Then I stumbled across an update of a something far more “under the radar” that I had found back in March of 2009. See below for the link to that post, specifically the section titled “Canada-EU Free Trade?”

The gist of that tidbit from March follows:

Friday I received the daily newsletter from Radio Canada International and once again there were squibs included that I couldn’t find at either the RCI site or when I searched around the CBC’s news area.

Read these with an eye to several posts that will be starting tomorrow, with American Lassies’s post entitled “THE PROPOSED NORTH AMERICAN COMMUNITY/NORTH AMERICAN UNION: 2010 Is Just Around the Corner.”

OTTAWA: CANADA, EU AGREE ON FREE-TRADE AGENDA

Canada and the European Union have agreed on a framework for negotiation of a free-trade accord after six months of discussions. Canadian Trade Minister Stockwell Day says the two parties will discuss goods and services, investment rules, intellectual property and free circulation of workers. The minister says Canada’s provinces will take part in the negotiations. Bilateral trade last year was worth $90 billion, an increase of seven per cent over 2007.

***

Well, guess what? Things have been moving along…and  include MORE than Canada and the EU.

From Fortune at money.cnn.com:

Plotting the biggest trade deal of the 21st century

Tax-free Champagne, anyone?

European and North American politicians are plotting the biggest trade deal of the 21st century: a $35 trillion, duty-free region encompassing the E.U., the U.S., Canada, and Mexico

by Erik Heinrich, contributor
Last Updated: October 29, 2009: 2:17 PM ET

TORONTO (Fortune) — Not even Franz Kafka could have dreamed this one up.

This past spring, prime ministers Stephen Harper of Canada and Mirek Topolanek of the Czech Republic met with European Union mandarins from Brussels. The setting was Prague’s medieval castle — made famous by Kafka in what is perhaps the darkest novel in his moody oeuvre — where they hatched a plan for the biggest free-trade deal of the 21st century.

How could a development of this magnitude result from a fairly routine conference between Canada and the EU? (At the time, the Czech Republic was responsible for the trading bloc’s presidency, which rotates between member states every six months.) The short answer is that after decades of spinning their wheels, Canada and the EU finally agreed to begin negotiating a free-trade agreement (FTA).

Immediately after declaring these talks as “hatching” the plans for “the biggest free-trade deal of the 21st century,” the reporter immediately shifts gears:

That’s far from a Bond-villain plot for world domination. But fast forward to last week in Ottawa, Canada, where the first round of Canada-EU negotiations reached a successful conclusion, with both sides optimistic that a deal can be signed as early as the summer of 2010.

Wow, I’m so relieved! No “plot for world domination” here!

But it all boils down to trying to save the neck of the U.S. apparently (my bolding):

When that happens, a push will begin for the ultimate goal behind the Prague agreement: a NAFTA-EU trade zone to counterbalance the growing economic power of Fortress Asia, and the ascendancy of the so-call BRIC (Brazil, Russia, India, China) group of countries.

“The U.S. will lose its leadership position in trade unless it comes up with a new strategy,” says Steven Schrage, a specialist in international business at the Center for Strategic and International Studies (CSIS) in Washington. “It makes sense to integrate NAFTA with the EU.”

Annual two-way trade between Canada and EU is about $100 billion, less than 20% of the total between Canada and the U.S. under NAFTA. But a trans-Atlantic NAFTA-EU trade zone would encompass nearly 1 billion people and account for $35.2 trillion in annual GDP, more than half the world’s total.

The article continues by noting that  China, India, and the 10 ASEAN nations (Association of Southeast Asian Nations) are “not standing still.” Our buddies at Goldman Sachs opine that “by 2050 the world’s three biggest economies will be China, the U.S. and India in that order, compared to the U.S., Japan and Germany today. That represents a clear shift away from the G7.”

A NAFTA-EU trade deal may get stiff opposition here in the U.S.  Why?

However with protectionist sentiment in the U.S. gaining momentum, helped in part by President Obama’s controversial Buy-American position, getting the world’s biggest economy to expand its free-trade frontier could be an uphill battle. At least for the near term.

But wait a minute…

Marc Ambinder in The Atlantic provided a transcript of Obama’s musings in his piece of February 3, 2009 titled  Obama Wants “Buy American” Out Of Stimulus Bill and you can find more stories on the “back down” below!

So, the Fortune report seems to have “forgotten” what went on in February.  Which begs the question–how “uphill” will be this “battle” to integrate NAFTA with the EU in the “near term”?

In my last post I listeda series of posts related to globalization and here’s the link to the post by American Lassie titled  THE PROPOSED NORTH AMERICAN COMMUNITY/NORTH AMERICAN UNION: 2010 Is Just Around the Corner (March 9, 2009) that was mentioned above.

So, do you think all this NAFTA-EU “conflict” will be settled sometime next year?

Well, silly me!  The Fortune article actually informs us that “both sides optimistic that a deal can be signed as early as the summer of 2010.”

DUH!

Everything right on schedule!!!

***

Related Post on Canada-EU Free Trade from March 2009:

The Past Week: March 1-7, 2009 (More on Sinclair Lewis; Canada-EU Free Trade?; China Eyeing the Big Three Automakers’ “Juicy Bits”?; Palin’s “Troopergate” Foe Winds Up In Obama Administration)

Related Posts from February 2009 on Obama’s backdown on “Buy America”:

President Obama to water down ‘Buy American’ plan after EU trade war threat (The Times, UK)

Obama backs down over ‘Buy America’ after EU warns him not to start a global trade war (Daily Mail, UK)

Don’t worry about ‘Buy American’: Obama (Rediff India Abroad)

Globalization in Pictures: Courtesy AT & T

By InsightAnalytical-GRL

Since I seem to be always thinking about the demise of the dollar and the march of power and wealth to the East (China, in particular, with India and other S. E. Asian countries joining in the fun), this flyer really reminded me of what’s going on a lot closer to home.

We’ve discussed in the past the “North American Union” scenario and things like that “super highway” plan and the new Mexican seaport which will probably hurt West Coast ports.  Drug cartels are now talked about all the time.

But the ad I received yesterday really was so “in your face” that I couldn’t resist sharing it with you.

AT & T is one of those companies that is billed as a safe-haven investment during this rough economic time, offering some growth and dividends to help increase a retiree’s income.  It’s American as apple pie…but, like most multinational corporations, it’s “reaching out to touch someone” somewhere else bigtime.

Living about 50 miles from the Mexican border, I have to say that I enjoy the food (eat salsa every day, tortillas constantly, and do green chile) and the many lovely Mexican immigrants and long-time citizens  that I’ve met over the last decade. We’ve got about 5 Spanish television stations and the radio is full of Mexican music from here and directly from Mexico, which is really fun to listen to (sort of like polkas in Spanish!). I know lot of folks who cross the ordeer for affordable dental care and I’ve visited a Mexican pharmacy myself. The culture is wonderful and the people are warm and friendly, but, of course, the poor from the other side of the border want to come here.  I’ve met women who’ve left their families to come here in the hopes of being able to send money home and also to escape extreme poverty and danger.

Even the local Walmart features  several services to send money to Mexico.

This is the way it is, a fact of life in these parts. There’s nothing inherently wrong with having lots of cross-border activity…heck, if we were in Europe it would be exactly the same thing.  I recall visiting the Gallup Organization in London when I was working for the parent company in Princeton, N.J. years ago (before it was sold to a big outfit) and how fascinated I was that one of the women in the same job there that I had in the U.S. was prepping for a trip to about 5 countries as if it were nothing out of the ordinary…sort of like the way I prepped to do a big job out in California, I guess.

It’s just that normal back and forth has been supplanted by something a lot more complicated than families visiting relatives. We’re now in globalization mode and it’s on steroids.

And here’s what AT & T is marketing to exploit the situation…

2009_1102MexicoCallLocal0004

Outside of the AT & T advertising...

And, when you open it up, there’s a pop-up, just like one of those children’s picture books with pop-up pages:

2009_1102MexicoCallLocal0003

A pop-up ruin...

I don’t have relatives in Mexico but I know people who do. I hope it helps them to stay close to them via phone and enables them to save money.

But, still…it does show how the globalization train is pretty far down the tracks, at least in these parts…

***

Related Posts

El Paso Media Conference Pushes “Newspapers as Change Agents”; Interesting Background of Organizer (February 20, 2009)

Secy. of Defense Robert Gates Downplays Possible U.S. Role as Fears of Mexico Collapse Mount; Don’t Be Fooled, There’s A Bush-Era Agenda Still Going On Here… (March 6, 2009)

THE PROPOSED NORTH AMERICAN COMMUNITY/NORTH AMERICAN UNION: 2010 Is Just Around the Corner (March 9, 2009)

What’s Going On North of the Border: The Canadian Economy and Stimulus Plan (March 11,2009)

Mexico Plans World’s Third Largest Seaport, Will Impact U.S. Ports on West Coast; Citigroup to Help Finance? (Updated 1X More on TARP $$ Going Overseas) (March 12, 2009)

Obama on the Border: The Language Shift & Plan to Use Executive Orders–Tying It All Together (Security, Trade, Immigration ) (March 13, 2009)

The Hitchhiker’s Guide to the North American Union: A Layman’s Overview of the Coming New World Order (March 17, 2009–by Grail Guardian)

The Past Week: March 22-28, 2009 (A Split in Russian Political Forces as Putin Weakens; The Voice of Korea, North Korean Propaganda Outlet; G-20 Protests Begin; A Prescient Wish for a Bush Successor ca. 2006; X-Rated Google Earth)

~~By InsightAnalytical-GRL

We spent some time last week discussing pronouncements by China and Russia re: the dollar.  But here’s some information on what’s going on in Russian politics.

Apparently, the Russian political system is being strained by the current global economic crisis.  The split between military/security officials versus the economic political liberals is beginning to surface. Vladimir Putin was supposed to be the link between the two factions, but his influence as Prime Minister is apparently weakening:

From The Guardian archives (March 3):

Putin and Medvedev factions locked in Kremlin financial power struggle

• Evaporation of wealth eroding PM’s authority
• Security and economic cliques on collision course

SNIP

The sudden evaporation of Russia’s newfound wealth has set the two Kremlin cliques on a collision course and put Putin – now prime minister – in an awkward position. As a former KGB agent he is heavily identified with the security group, known as the siloviki, but he also has strong personal loyalty to a small clique of liberals from his home town of St Petersburg.

Experts say Putin is losing status as he attempts to contain conflict between the factions. Cracks are appearing in his relationship with Medvedev.

“Putin used to act as an arbiter standing above the two main clans – the siloviki and the rational economists,” said Dmitry Oreshkin, a leading political analyst. “Now he’s been dragged down into the fight and he’s under fire from both sides. The siloviki say he’s a weakling incapable of imposing his will and showing the economists their place, while the economists in turn are consolidating around Medvedev.”

Medvedev, handpicked by Putin from among loyal acolytes as a successor, has begun to issue muffled criticism of his mentor, leading some to believe that he may be enjoying the trappings of power and be prepared to flex his political muscle.

MORE

Who will win?

***

With North Korea moving rockets around for a test of a suspected long-range ballistic missile sometime between April 4-8, Japan is ready to launch interceptors:

Japan Readies Missile Interceptors

Published: March 27, 2009

TOKYO — Japan authorized its military on Friday to destroy any debris from a North Korean rocket that might fall on its territory. North Korea has said it intends to put a satellite into orbit as early as next week, and warned that fragments could fall into waters off northern Japan.

Japan, South Korea and the United States suspect the launching is a cover for a test of an intercontinental ballistic missile, the Taepodong-2. In response, Japan will deploy missile interceptors and dispatch two warships to the waters between it and the Korean Peninsula, said the Japanese defense minister, Yasukazu Hamada.

A battery of Patriot land-to-air missiles will also be deployed in Tokyo, he said. “Whether it’s a satellite or a missile, we are extremely uncomfortable with the object flying over Japanese territory,” Mr. Hamada said.

MORE

With the tensions between North Korea back in the headlines, I’m reminded of what it’s like listening to the Voice of Korea, which beams into North American for an hour every day via  shortwave radio.  If you want to listen to what the last Stalinist state sounds like on the radio and don’t have shortwave receiver, here’s a recording off the radio that will give you a sampling of N. Korean propaganda from Pyongyang  (from June 23,2008).  After the sign on, you can fast foward through the martial music and listen to the news and glorification of the “immortal exploits” of Kim Jong II as well as cultural segments… The site also has audio of such inspiring songs as “I Will Be a Solidier of Marshall Kim Jong II”.

Voice of Korea may sound over-the-top,  but, having experienced the glorification of Barack Obama by the media and the glossing over of the news here in the U.S. and the actions of Obama and his sycophants, it makes me wonder if things we’re hearing here are that much different than the propaganda pouring out of North Korea!   (More at the home page of English Radio from North Korea ).

And here’s some fascinating background on other North Korean broadcasts–coded “Numbers Broadcasts” to agents.  You can listen to some of them at the site using Real Player.

***

In 2006, Antonia Juhasz published* a book entitled “The Bush Agenda: Invading the World, One Economy at a Time.”  It went beyond the Bush Adminstration, however, as it traced the history of U.S. corporations in the growth of globalization and detailed the role of the International Monetary Fund (IMF), the World Bank, and the World Trade Organization.

I happened to pick up the book again in light of recent events and couldn’t help being struck by the opening paragraph of the book’s jacket description…especialy the last sentence.

In this important book, renowned international trade and finance policy expert  Antonia Juhasz exposes a radical corporate globalization agenda more befitting of a ruthless empire than a world leader in democracy.  This agenda has been refined by leading members and allies of the Bush Administration over decades and has reached its most aggressive implementation under George W. Bush. And Bush Agenda adherents hope it will outlast him.

Reading that last sentence has simply reinforced my suspicions about WHY we had Barack Obama shoved down our throats…

By the way, G-20 protests have already begun…

Thousands join London G-20 protest

***

Finally, on a lighter note,we see a kid in the  UK who decided to get Google Earth’s attention.  While many of us try to avoid Google at all costs, this guy decided to use it to full advantage:

Teenager’s 60ft painting of penis on parents’ roof spotted in space

When ancient Britons drew male genitalia on chalk hillsides, little did they know people would ape their customs millennia later…

SNIP

Teenager Rory McInnes painted a giant phallus on the roof of his parents’ West Berkshire mansion, apparently after watching a programme about Google Earth.

The BBC delicately describes it as a “comedy painting”, saying it was there for a whole year before his parents found out.

MORE

And this isn’t the first try at this, either. I must say, it’s a find rendition. Go take a peek for yourself…

***

THE PAST WEEK

*By Kenosha Marge

Saturday Sanity: The Antidote to the Madness (March 28, 2009) First Hummingbird and First Cactus Flower!; Wisconsin Robin; Happy Birthday, TORO the Dog!; Trooper Shows Off)

Russia-China Proposals; “Rebalancing” Global Currency Reserves: Why the U.S. Can’t Take Anything for Granted Re: the Dollar

EXPOSED! ACORN Behind Protests at AIG Homes, Under S.E.I.U. Rent-a-Mob Contract

A Reminder: Live Streaming of the First “Bernard L. Schwartz Economic Policy Symposium” Today (3/26) With a Rather Interesting Group & Agenda (To End “Fumbling” on Economic Policy)

The Scanner-Politics: March 25, 2009 (G-20; Glenn Beck’s “The One Thing” Segment on the Dollar [Video]; “The Big Takeover”; Al Gore Releasing New Book on Election Day 11/3/2009; Augie the Dog Sends a Deposit to the U.S. Treasury)

The Scanner–International Edition, March 24, 2009: Say Goodbye to the Dollar? China, Russia Proposing a New World Currency for “Non-Credit” Based Economies, Echo G-20 Agenda of Expanding IMF; China Will “Consider” Buying IMF Bonds; 10th China Develpment Forum Underway (UPDATE 1X–Geithner Supports China Proposal??)

*When is Being “Reasonable” Simply “Unreasonable”? (Especially When It Comes to Our Money?)

The Past Week: March 15-21, 2009 (Home Gardens on Alert?; “Practical” Democrats Group; Federal Education Stimulus $$ Going to Rich Schools; Soldiers Pledge to Refuse Illegal Orders; New Marxist President of El Salvador Compares His Message of Change to Obama’s)

***
*Publishing information:
Juhasz, Antonia. The Bush Agenda: Invading One Economy at a Time.  2006, HarperCollins (Regan Books), New York.
(yes, THAT Judith Regan)

The Scanner–International Edition, March 24, 2009: Say Goodbye to the Dollar? China, Russia Proposing a New World Currency for “Non-Credit” Based Economies, Echo G-20 Agenda of Expanding IMF; China Will “Consider” Buying IMF Bonds; 10th China Develpment Forum Underway (UPDATE 1X–Geithner Supports China Proposal??)

~~By InsightAnalytical-GRL

Scroll down for UPDATE

Whos in Charge Here?

Hu Jintao--Who's in Charge Here?--Barack Obama (Photo courtesy Xinhua via CRIEnglish.com)

Late last week I came across this release from Itar-Tass.  In case you can’t place the name, the IT website tells us that this agency is:

The successor to the Soviet TASS news agency, it was re-named in 1992, when Russia proclaimed its sovereignty following the collapse of the USSR. It has retained its status of being the state central information agency.

Needless to say, when Russia’s “state central information agency” talks, I listen. I held the story up and coincidentally, found something that should grab us all.  First, the story from Russia:

Russia proposes creation of global super-reserve currency

16.03.2009, 15.15

MOSCOW, March 16 (Itar-Tass) — Russia suggests the G20 summit in London in April should start establishing a system of managing the process of globalization and consider the possibility of creating a supra-national reserve currency or a “super-reserve currency.” The Russian Federation’s proposals for ways out of the ongoing financial and economic crisis and for a post-crisis order of the world financial system have been published on the Kremlin’s website. The proposals have been dispatched to the leadership of the G20 countries, the CIS and international organizations.

(SNIP)

The Russian side believes the summit should seek and achieve accord on the main parameters of a new world financial system. It suggests calling an international conference that would produce the basic parameters of a world financial architecture and adopt international conventions regarding a new financial world order.

Russia believes that the “obsolete mono-polar structure of the world economy should give way to a system based on cooperation by several major centers.”

In the sphere of control and supervision Russia suggests drafting and adopting an international agreement setting global standards of control and supervision in the financial sector – a Standard Universal Regulatory Framework (SURF).

Russia calls for reforming the international currency and financial system with the aim to strengthen its stability and control. In that connection the Russian side suggests discussing the possibility of expanding the list of currencies to be used as reserve ones, on the basis of the adoption of agreed measures to stimulate the development of major regional financial centers, and also “the creation of a supra-national reserve currency that will be issued by international financial institutions.”

“It looks expedient to reconsider the role of the IMF in that process and also to determine the possibility and need for taking measures that would allow for the SDRs (Special Drawing Rights) to become a super-reserve currency recognized by the world community,” the document says.

MORE

The release goes on to discuss for a new mandate and more resources for the IMF.

Well, now add this piece, posted by Logistics Monster yesterday in a post entitled Quick Note About New Global Currency! Pay Attention!

The post quotes an article from the Financial Times‘ Asia-Pacific section (excerpt):

China calls for new reserve currency

By Jamil Anderlini in Beijing

Published: March 23 2009 12:16 | Last updated: March 23 2009 23:24

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies.

I suggest readers get over to Logistics Monster for the full quote from the article, which details the “special drawing rights” that we see mentioned in the Russian Itar-Tass release.

The Russia-China discussions apparently are just megaphones for what’s up at the Official G-20 website (excerpt):

The financial markets and the world economy continue to face serious global challenges and the severity of the crisis and ongoing uncertainties demonstrate the need for urgent action. During the United Kingdoms Chair, the immediate priority will be to gain further agreements for a concerted, co-ordinated international response.

The G-20 will need to send a strong signal that it is prepared to take whatever further actions are necessary to stabilise the financial system and to provide further macroeconomic support. At the same time, the G-20 must commit to maintaining open trade and investment, to avoid a retreat to protectionism, and direct necessary additional support to emerging markets and developing countries.

The G-20 should also lay the foundations to move beyond the crisis to a sustainable recovery. In 2009, it will be important to understand the roots of the international financial crisis and identify the lessons that we can learn to ensure that a crisis of this kind does not happen again. The G-20 should develop proposals that will restore global growth in the medium term, including the unwinding of emergency measures taken in response to the crisis.

Coincidentally, with the proposal to bolster the mandate of the IMF, we see this article from the Chinese news agency,
Xinhuanet/China View:

Central bank official: China “will actively consider” buying IMF bonds

www.chinaview.cn Special Report: Global Financial Crisis

BEIJING, March 23 (Xinhua) — China’s central bank said Monday it will “actively consider” buying bonds issued by the International Monetary Fund (IMF).

Hu Xiaolian, vice governor of the People’s Bank of China (PBOC), made the comment during a briefing about President Hu Jintao’s coming visit to the G20 financial summit in Britain, scheduled for April 1 to 2.

“China supports the IMF’s innovative financing attempts, and a more efficient and timely financing mode can effectively ease the IMF’s cash shortage,” said the PBOC’s Hu.

“If the IMF finances itself by issuing bonds, China will actively consider buying” those bonds, Hu stressed.

Of course, the Chinese have already indicated that they are “worried” about U.S. Treasury bonds and a recent China Daily headline reads:  “Allure of US Treasuries Set to Fade”

“Although China is unlikely to massively cut its existing holdings of US Treasuries, it will try to reduce purchases,” said Yu Yongding, president of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.

The table is set.

I’m sure the G-20 will toast the dollar with fond reminiscences…

MEANWHILE, ahead of the G-20 meeting, China is now holding its 10th China Development Forum (excerpt):

Chinese premier: World should have faith in China

www.chinaview.cn

Special Report: China Development Forum 2009Special Report: Global Financial Crisis

China has launched plans to expand domestic consumption and promote economic growth. It will try its best to achieve the goal of eight-percent economic growth set for this year, according to Wen.

With timely efforts, the economy in some areas and industries in China is now witnessing better signs, Wen said.

“China can’t achieve self-development without rest of the world,” the Premier said, adding that China hopes to deliver confidence to the world and the world should have faith in the country.

SNIP

High-level officials, entrepreneurs, scholars and leaders from international and non-governmental organizations attended this year’s forum with the theme of China’s Development and Reform in the Global Financial Turmoil.

Remember the days when other countries sought “closer ties” to the U.S.? Well, Obama wants a “closer relationship” with China.

When these two meet at the G-20 session, who will be setting the pace?

And lest we forget Putin: he’s doing some saber-rattling…

Russian PM Putin Threatens to Review Relations with EU

SOCHI, March 23 (RIA Novosti) – Russia will start reviewing its relations with the European Union should Moscow’s interests be ignored, Prime Minister Vladimir Putin said on Monday.

SNIP

Russia had been effectively excluded from talks at an international investment conference in Brussels on the modernization of the Ukrainian gas pipeline network, adding that the conference, convened by the European Commission, was limited to discussions between Ukraine and the EU.

“If Russia’s interests are ignored, we will also have to start reviewing the fundamentals of our relations,” Putin said. “We would very much like for things not to reach this point.”

Interesting times, indeed…frightening times.

***

UPDATE March 26, 2009

EXCERPT:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAHStUZFitk8&refer=home

Treasuries Fall on Supply Concern as Seven-Year Sale Looms

By Dakin Campbell and Susanne Walker

March 25 (Bloomberg) —

snip

‘Poor Communication’

The Fed joins central banks in the U.K. and Japan in extraordinary purchases of government debt. U.S. policy makers announced the decision last week to buy $300 billion of government debt in the next six months along with a plan to more than double purchases of housing debt to $1.45 trillion, hoping to reduce rates on home loans.

The dollar fell the most in almost a week against the euro on concern Treasury Secretary Timothy Geithner supported a Chinese plan to blunt demand among global central banks for the U.S. currency. The dollar weakened as much as 1.2 percent to $1.3651 per euro, the biggest intraday decline since March 19, before trading at $1.3601 at 4:20 p.m. in New York.

Geithner later affirmed the dollar’s role as the world’s reserve currency.

“The poor communication from the Treasury department has complicated the market for Treasuries,” said Baker Group’s Caughron.

More

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ADDITIONAL INFORMATION

China Optimistic about Hu-Obama London Meeting (CRIEnglish.com report 3/23/09)

Official G-20 website

International Monetary Fund (IMF) website

CIS: Overview (from the Commonwealth of Independent States)

THE CIS –Executive Committee website

CIS Wikipedia article