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FINANCE MINISTERS from the G20 states have gathered in Moscow for a meeting aimed at reassuring markets that the world’s economic powers would not slug it out in “currency wars” to boost national growth.
For the first time in several meetings, the troubles of the debt-ridden eurozone will not be centre stage – with the main concern expected to be Japan’s controversial plan for “monetary easing” that weakens the yen.
President Vladimir Putin is due to address the ministers before closed-door talks get underway in this afternoon afternoon and continue into tomorrow.
“We do not want state intervention in exchange rates. We want exchange rates that are determined by the markets,” German finance minister Wolfgang Schauble told German Radio ahead of the talks.
“I am actually very confident that will also be the joint position of all G20 countries in Moscow,” Schauble added in an interview on Germany’s Inforadio.
The two-day G20 meeting, being hosted by Russia for the first time as it holds the presidency of the world’s leading economies, is a prime chance for Moscow to present itself as a reliable global economic player.
Russia has set itself the task during its presidency – which will culminate in the G20 summit from September 5-6 in Saint Petersburg – to launch a “new cycle of growth” through investment, transparency and regulation.
But economists fear that currency devaluations, making the national currency cheaper to stimulate exports and domestic activity, could prove too tempting if governments see no other way out.
The Japanese answer to the US policy of quantitative easing – where the central bank buys bonds held by banks, to increase the quantity of money in the economy – would be aimed at helping Japan reach an inflation target of 2.0 per cent after years of deflation.
Under heavy pressure from new Prime Minister Shinzo Abe and his ruling Liberal Democratic party, Japan’s central bank last month announced plans for monetary easing which immediately pushed down the yen.
But the Secretary General of the OECD, Angel Gurria, denied that a currency war was in progress, saying everyone wanted Japan to rid itself of the curse of deflation.
“There is no currency war. We are further today away from a currency war than we were two years ago or three years ago,” he said in Moscow.
“What we have is a number of countries using their instruments, whatever room they have left on the monetary side, whatever little room there might be on the fiscal side to generate growth or at least to stop the downturn.”
The G7 group of the world’s richest nations, including Japan, issued a statement on Tuesday declaring a commitment to “market-determined exchange rates” in an effort to soothe markets.
The United States has urged the world to refrain from “competitive devaluation”, a message echoed by the European Commission, France and Germany.
An appreciation of the euro as market sentiment improves could also be damaging for the extremely fragile economy in the eurozone.
Russia, which does not want to see the ruble appreciate against other currencies, had indicated its strong opposition to artificial currency devaluations.
“Trying to change the exchange rate is like trying to cure a serious illness with painkillers — firstly it will not help and secondly it will come back in any case,” deputy finance minister Alexei Moiseyev said this week.
“I think that this is harmful and useless,” he added, saying that the G7 statement had given the right signal.
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Banish the 1 cent coin. Canada has gone penniless, we should be next. http://business.time.com/2012/03/30/canadas-penny-is-no-more-is-the-u-s-penny-next/
sounds like price fixing if you ask me…
“Currency Wars”, sounds like something on the Discovery Channel
Brazilian president-elect Rousseff said in 2010:
The last time there was a series of competitive devaluations … it ended in world war two.
Billionaire investor Jim Rogers says:
Trade wars always lead to wars.
Top trend forecaster Gerald Celente has said for years that currency wars turn into trade wars … which in turn lead to hot wars.
Jim Rickards agrees:
Currency wars lead to trade wars, which often lead to hot wars. In 2009, Rickards participated in the Pentagon’s first-ever “financial” war games. While expressing confidence in America’s ability to defeat any other nation-state in battle, Rickards says the U.S. could get dragged into “asymmetric warfare,” if currency wars lead to rising inflation and global economic uncertainty.
Massive inflation directly led to the appointment of Adolf Hitler and his policies led to WW2
http://www.cbc.ca/news/business/story/2013/02/12/business-g7-currency-wars.html
That’s where the problems really start and conjures up images of the 1930 when countries pursued tit-for-tat devaluations in order to get an edge. However, the outcome was to decimate global trade, accentuate the depression and sow the seeds for World War II.
@ Conor: The 1930s currency wars that evolved from the abandonment of the gold standard due largely to the great depression in the US & floating currencies without intrinsic value is occasionally quoted as one of the reasons for the extended nature of the 1930s global depression. Germany’s economic woes of that period, while primarily due to WW I reparations that stifled state interventions & investments, were worsened by the struggling global economy brought about due to the currency wars. In this regard, the 1930s currency wars could be viewed as a precursor to rise of National Socialism & the second world war.
Furthermore, no need to insult a contributor just because you don’t understand them. Ultimately, nothing Julie has said is incorrect, but it is a matter of opinion just how great a role the currency wars played in the conflict. If I might offer some advice, you may consider pursuing a ” first class degree in business management’ – I know a local shed still accepting applications for the upcoming academic year!
The 1930s wasn’t a currency war for a start. The case of the Germans was massive hyperinflation created by printing money in a collapsing economy. Not to make exports more competitive.
Stop making yourself out to be a victim, you’ve said some horrible things about people on here. I just have simply asked you a question which you refuse to answer. Which is hypocritical since you have used your apparent education numerous times to try and win arguments. So are you going to answer?
I do have a degree just not a first like our Julie.
So Julie you going to answer?
is it a degree in self obsession conor?
Degree in personal insults when you don’t like someone’s opinion.
What do you mean the 1930s wasn’t a currency war? There was a currency war between the US, UK & France in the aftermath of the great depression. And while the Germans may not have been involved in the currency war itself, no one was immune from the effects of three of the world’s largest economies going toe toe with one another, least of all France’s economically struggling neighbour. Don’t assume the Germans turning on the printing presses to fund a war effort was the only reckless monetary policy going on at that time.
@ Julie
The man froma Del Monte he say yus
Aren’t the UK at this indirectly now? Instead of the Bank of England amending interest rates. The Prime Minister was all talk about parting ways with the EU. All just a ploy to devalue the currency and boost trade into neighbouring EU countries such as Ireland. Almost overnight Irish retailers could avail of cheaper goods from UK manufacturers if they bought currency at the new rate.
Germany against anything that might inflate the euro , now there’s a surprise, Irish debts look likely to remain when our grand children are paying them off
The Currency War has been going on since 2010 only getting a mention now because its coming to a head..U.S 22 Trillion in debt alot of it owed to China .Chinese now realise U.S can never pay them back and Their Government bonds are becoming Worthless as QE1 2 3 and maybe 4 devalues the Dollar.Major Nations scrambling for Gold because when either the Japanese or U.S stock markets crash the Gold standard will be the true currency again and not the unsustainable digital junk countries have.Their is a huge crisis coming down the road with sub prime Mortgages and Derivatives .Financial Crisis, Currency War, Hot War if you dont think so look at the superpowers of the World practicing military drills on huge scales The Chinese have a problem with Japan the U.S has moved its naval fleet off the coast of China and it has nuclear subs down in the middle east The Russians defend Iran along with China. The U.S Israel French British want to invade it.I aint now smart guy like alot of people on here but if you check out the right sources with proven track records for being correct their all predicitng a pretty bleak picture for the forseeable future all brought on by GiantScale Fraud By Banks Corporations and Puppet Governments over the last 100 years.Technology now gives them the chance for a World Government and Currency which giant corporations and Banks will run for profit and profit alone and if people have suffer so be it..Conspiracy Theory Tin Foil Hat hat ya ya its unfolding but keep denying it and then when it comes true have a big debate but dont ever try and figure it out in time.Same as Ireland here see all the warnings go into denial then it happens have a big debate still kind of denying the problem before its accepted then because its absolute its to late because the problem has become juggernaut that cant be stopped,Start thinkin outside the box because the Elitist do and stop thinking they want to help ye because as far as their concerened we are all oxygen thiefs who they could do without.Roll on the bluepills im bonkers comments but ye have to admit were it abit slow on the up take really in this country hence thats why we are the laughing stock of Europe.
Jack , interesting, are you right, I don’t know but something is happening and it ain’t in the working mans best interest
Very true jack, people need to start waking up, takes a few mins to look up everything you said, all true. Scary, what is ahead of us. RT news is very good at highlighting some of these issues.
Big operation in the planing along time .What do really Wealthy Powerful people talk about they have all the money they need its about complete control.Was out of work a year or so so i just started digging around everyday trying to find out what causes crisis wars ect and what were told and what we see is a smokescreen for what is really going on which is in my view is a Communist style global government controlled by one currency .Think Chairman Mao’s china on a grander scale they make the rules if you dont like it disappear .I dont fall for Conspiracy but when its happening in front of your face and its only history repeating itself Shay .There is really wealthy Investment Bankng Familys who through debt pull the strings in every country in the world these are the decision makers and their going for their New Banking Government and they have their puppets well placed to bring it about.
Read treasure islands recently, tax avoidance and how it happens,
Supports what you say, Huge volumes of cash floating around looking for easy profits, can’t afford to wait for the end game
We are puppets
Jack, excellent post. It’s amazing the quality of posts on this site compared to the so called “experts” the mainstream media trundle out. These same “experts” who promised us a “soft landing”! And these people still get airtime as experts and are paid by financial institutions whose debts we now must pay. And what are we being told now? We must pay the bankers debts! And now in Ireland I can see just this last couple of weeks that we are being softened up for NATO membership. Sometimes I think I’m dreaming this and will wake up…
Just had to delete a couple of comments for ad hominem attacks.
Thanks for clearing that up.
Good reporting Gavan even though its a small piece but this needed to be brought up because its the biggest event happening on the planet. Excluding BallyHea says NO and our newly formed Tralee says No which is happening this weekend. :)
How can they avert a currency war now that started years ago? QE, as the US & UK among many others have been engaged in for the past few years, is an offensive tactic in a currency wars scenario, especially with the US dollar as it is the global reserve currency. Not necessarily saying that either the UK or US engaged in QE as an offensive tactic, but the results on other countries (particularly China) have been the same as if they had been offensive moves.
Dead on – these currency wars have been going on for years – and they are an offensive tactic . It is just the latest japanese devalutaion that has frigtened the thugs .This is a race to the bottom – until we are all paid low wages – and are ” competitive ” with semi slave labour of SE Asia .
One US ” economist ” said the US could print off the Trillions it owes China – and pay off China – and say to them ” go buy a loaf of bread ”. That is the deep sort of thinking of many US ” economists ”.What did he think a loaf of bread would then cost a US citizen ??.
They disregarded Peter Schif assment in 2006 that a bad Recesion was on the way – and these are the people we follow economically and politically .
this devaluation will go on and on – and the Rich wil still prosper – as most just become slaves . Remember the US was founded by some slaveowners – to whom the idea of democracy would be unaccptable – and it took approx 90 years to in part get rid of it – and that with a President – Lincoln – who was om with slavery – but had to use it as a last resort when it seemed the North might not win the Civil war .
”But the Secretary General of the OECD, Angel Gurria, denied that a currency war was in progress, saying everyone wanted Japan to rid itself of the curse of deflation.
“There is no currency war. We are further today away from a currency war than we were two years ago or three years ago,” he said in Moscow”
what a bl##dy lar .
”
In fairness though, WW2 was the spring board out of depression and into the prosperous 50′s, so maybe we need a WW3 and living off garden-grown cabbage for a few years would be worth it.
have your say