Bold Actions Of G20 London Summit

As I recognize it, there remains a debate between those who believe that the current economic environment compels a dramatic rethink of the foundations, systems and structures upon which the global economy operates, and those who believe that such sweeping reforms are both unnecessary and politically impossible.

In short, there are those who seek to begin the process of crafting a ‘new Bretton Woods’ and those who seek to ban the use of that phrase altogether.

In my earlier post, I wrote(scribbled) about "the global financial sector is in need of structural reform". I believe that the current economic crisis provides an opportunity to reshape the global financial system in ways that more accurately reflect the global nature and risks inherent in 21st-century banking, finance and capital flows.

This G20 gathering represents a true ‘free market’ where there is competition for ideas, creativity and leadership. It provides the perfect opportunity for a 21st-century successor to the intellectual and creative leadership of John Maynard Keynes to emerge.
To be successful, it is imperative that the United States play an active leadership role at the London Summit. The US has a unique role. The failure of the US to assume a leadership role, especially with the presence of President Obama, would undoubtedly be seen as an
opportunity missed.

The most innovative and bold structural proposals have come from Europe, where a recent report by the High Level Group on Financial Supervision in the EU, under the direction of Jacques de Larosière, contains some very worthy, realistic and detailed recommendations.
Unofficial groups, such as the G30 Financial Reform Working Group chaired by Paul Volcker, have similarly issued reports which I urge summit participants to review carefully and consider seriously.
The proposal is important because it seeks to address the systemic nature of risk, which underpins the existing financial system, and also because of its inherent inconsistency.
Given the magnitude and scale of the issues now confronting summit participants, those officials tasked with its preparation should not feel bound to adhere strictl to the agenda and working groups created four months ago.
Now is not the time for caution, but rather the time for bold assertion of leadership, ideally by the United States, but hopefully with the collective support of the global community.

End Of Dollar Dominance

There is now an important new addition to the list of global currency enthusiast, the Chinese Central Bank. According to the Governor the world needs a common currency managed by International Monetary Fund(IMF).

Leaders of G20 are to meet in London to discuss on the Global Economy along with it they are to discuss the new issue of Global Currency.

As in my previous post(Petro-Dollar) I have emphasised on how the US got hand on the Currency business and how the strength is going down. The report has come somewhat true.

Thats why I usually say:

"Bloggers are never WRONG".

Dollar Dominance is likely to be under threat as world economic power gets disbursed.

According to experts setting an all together new currency wont be that easy. For this to happen, all the countries will have to converge to similar levels of public debt and inflation.

To jump-start a new global reserve currency, economists say, it would require someone effectively subsidizing the cost of bringing buyers and sellers together for the time it takes the currency to get the traction.

Benefits of a global currency would be independence of countries on one separate national currency, because as USA falls the currency may weaken in global market leading to the weakening of other nations(especially Developing) for no fault of theirs.

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