The much-touted G20 meeting was a dud.As near as I can tell, nothing was accomplished.
There was some movement to enlarge the IMF.
I think this is a clear sign that the deciders at Cannes have come to realise that their own central banks are not up to the tasks at hand.
The thinking is that the IMF will become a lender of last resort for troubled countries in Europe.
There is not a chance in hell for this to work.
The IMF has neither the resources nor the (true) backing of the member countries to put a dent into the financial disaster that is rapidly unfolding.
I got a laugh at one development.
The G20 confirmed that the head of the Swiss National Bank, Philipp Hildebrand, has been appointed as the Vice-Chairman of the Financial Stability Board (FSB).
Separately, the communiqué had this to say about currency manipulation:
“We affirm our commitment to refrain from competitive devaluation of currencies.
Our actions will help address the challenges created by developments in global liquidity and capital flows volatility, thus facilitating further progress on exchange rate reforms and reducing excessive accumulation of reserves.”
What a joke.
Hildebrand engineered the biggest currency devaluation of 2011! He did it with the sole objective of maintaining the Swiss competitive position within the EU.
In the process, the SNB accumulated $200b of reserves. The SNB has done exactly what the G20 says should not be happening, yet the guy who called this shot gets a nice new job as a decider at the FSB. It gets better.
“Sarkozy takes swipe at “tax havens”
French President Nicolas Sarkozy has spoken out against tax havens at the conclusion of the G20 summit, calling for them to be “excluded from the international community”.
At the meeting in Cannes, Sarkozy listed 11 states, including Switzerland, which – he said — do not have any legal framework governing the exchange of tax information.
“We don’t want to have tax havens any more. Our message is very clear,” the French president said.
Well, there you have it. The G20 puts the head of the SNB in a critical position while at the same time they accuse the central bank (and the Swiss banks they regulate) of aiding tax cheats. They also condemn them as currency manipulators.
And we’re supposed to have faith that the G20 is going to safely guide us through troubled waters.