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G20 2016 will make way for easier repeating 1997 Asian financial crisis
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G20 2016 will make way for easier repeating 1997 Asian financial crisis
Frank Feb. 24, 2016 in Waterloo, Ontario, Canada
G20 meeting will be held in Shanghai China at February 26-27, 2016.
Feb. 22, 2016, U.S. Treasury Secretary Jacob J. Lew says that Don't Expect 'Crisis Response' From Group of 20 Meeting and reiterated the U.S. position that China needs to let the Yuan go both “up and down with markets.”
“When there is pressure to appreciate, it has to be appreciating,” he said. “When there's pressure to depreciation, we can't complain if it depreciates.”
We should remember the disaster of 1997 Asian financial crisis was caused by currency free floating.
According to 1997 Asian financial crisis - Wikipedia, the Asian financial crisis was a period of financial crisis that gripped much of East Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion.
The crisis started in Thailand with the financial collapse of the Thai baht after the Thai government was forced to float the baht due to lack offoreign currency to support its currency peg to the U.S. dollar. As the crisis spread, most of Southeast Asia and Japan saw slumping currencies, devalued stock markets and other asset prices, and a precipitous rise in private debt.
In worsening the Financial Crisis, the US hedge funds – a financial instrument for brutal looting real economy has played a key role.
Faced with such financial disaster that harmed so many people, the US did not touch the culprit weapon - financial instrument at all.
So that, US urges China currency free floating in oncoming G20 meeting 2016 will make way for easier repeating 1997 Asian financial crisis.
We must be aware that It is that over developed financial economy wild plundering real economy caused economic downturn.
Currency Commitment
Lew said the U.S. wants a more serious commitment from other G-20 countries to use monetary policy, fiscal measures and structural reforms to stoke demand.
“You can’t count on the United States providing all the demand for the world. You can’t be the consumer of first and last resort,” he said, adding that China can do more to stimulate consumer demand and Europe and Japan can use fiscal policy to boost growth.
He said the U.S. will be pushing for a firmer commitment by nations not to try to boost their economies by depreciating their currencies.
“If the conversation were to go the other way, and you were to see some reticence to make the commitment to refrain from competitive devaluation and not take it a little bit of a step further, that would be a cause of real concern,” Lew said.
Much of the spotlight at this week’s meeting will be on China, which has struggled to maintain confidence in its policy making since a surprise devaluation of the yuan in August. People’s Bank of China Governor Zhou Xiaochuan broke a months- long silence in an interview with Caixin magazine published this month, arguing there’s no basis for continued yuan depreciation.
While the challenges facing China’s economy are “really quite significant,” Lew said, “they're being interpreted in a way that is unduly negative.”
Still, he said a lack of communication about the country’s currency policy has “made it very hard for anyone to really understand what they were trying to accomplish.”
Lew reiterated the U.S. position that China needs to let the yuan go both “up and down with markets.”
“When there is pressure to appreciate, it has to be appreciating,” he said. “When there’s pressure to depreciation, we can’t complain if it depreciates.”
FEB. 22, 2016
Worried about global growth, the United States will press G20 powers to boost their economies when the group's finance chiefs meet in Shanghai this week, a senior US official said Monday.
The official said that Treasury Secretary Jacob Lew, representing Washington at the Group of 20 meeting, will also travel to Beijing to press on his Chinese counterpart the need to stick to its reform plans.
"Globally there remains a shortage of aggregate demand," the Treasury official said, insisting on anonymity.
"We think the global economy can do much better."
The official pointed to China's slowdown and weak growth in Europe as contributing to overall weak demand around the world.
He said Lew would recommend to his G20 counterparts at the February 26-27 meeting "that all levers of policy be deployed," meaning fiscal spending, monetary policy and structural reforms.
The official said that it was especially important that countries with strong finances spend and invest more to boost demand, at home and internationally.
"More and more it is important that those countries with fiscal space utilize that fiscal space," he said.
The US will also emphasize the need for countries to stick to pledges not to engage in competitive devaluations of currencies to boost export competitiveness, a crucial issue as China's yuan weakens, challenging its rivals to follow suit.
Other issues on the docket include providing better access for the world's poorest to financial systems; strengthening derivatives regulation; and preventing multinational companies from minimizing their taxes by shifting revenues and business to low- and no-tax havens.
The US will also press China, the world's number-two economy, to follow through with its reforms as crucial to strengthening the world economy.
After the G20 meeting Lew will meet with his Chinese counterpart in Beijing "to urge China to implement the market-based economic reforms that it has committed to."
"He will urge the authorities to pursue policies that support domestic demand, especially fiscal policies," the official said.
Treasury Under Secretary for International Affairs Nathan Sheets, in an opinion piece published Sunday on Medium, wrote that market turmoil has put a spotlight on "the need for China to accelerate the pace of its transition to a more consumption-led economy."
He also said that "clear communication to the market is critical" about China's policy to free up trading in its yuan currency.
