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???? G20 ???? and its ???? LEGALITY ????
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pharoah88
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07-Nov-2010 16:01
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WASHINGTON - Worries are overblown that the Federal Reserve's plan to aid the economy could unleash inflation, Chairman Ben Bernanke said. Bernanke's comments come hours after the Fed announced Wednesday that it will buy $600 billion worth of government bonds in a bold bid to make loans cheaper, spur spending and invigorate the economy. Critics, including some Fed officials, fear that all the money being injected into the economy could ignite inflation or speculative bubbles in the prices of bonds or commodities. Bernanke said those inflation fears are "overstated." A larger $1.7 trillion program launched during the financial crisis didn't result in higher inflation, he pointed out. When the economy is on firm footing, Bernanke expressed confidence that the Fed will be able to smoothly soak up all that money without harming the economy. Bernanke revealed his thoughts in an opinion piece scheduled to be published Thursday in the Washington Post. The Fed needs to take the action because unemployment is too high and inflation is too low, signs of a still-troubled economy, Bernanke explained. "We could hardly be satisfied," the Fed chief said. The unemployment rate stands at 9.6 per cent. It's been at least 9.5 per cent for 14 months, the longest stretch since the Great Depression. The "slack" in the economy — factories running below capacity and companies limiting hiring — has kept inflation historically low. In the 12 months that ended in September, consumer prices rose just 1.1 per cent. Bernanke has said the Fed would like to see inflation closer to 2 per cent to show the economy is making a solid recovery. The Fed's action on Wednesday also is aimed at nipping any deflationary forces in the bud. "In the most extreme case, very low inflation can morph into deflation (falling prices and wages), which contribute to long periods of economic stagnation," Bernanke said. Deflation is a widespread drop in prices, wages and the values of homes and stocks. It can cause people to delay purchases because they feel they can buy later at lower prices. Falling incomes also make it harder to pay debts. Foreclosures rise. So do bankruptcies. Once it takes hold, deflation is hard for policymakers to break. Deflation contributed to Japan's "lost decade" of the 1990s, and the country is still battling it. "With unemployment high and inflation low, further support to the economy is needed," Bernanke said. |
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pharoah88
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07-Nov-2010 15:54
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QE2
Bernanke defends new US$600 Billion bond-buying program;
says fears of inflation are 'overstated'
09:05 AM Nov 04, 2010
WASHINGTON (AP) - Fed Chairman Ben Bernanke says worries are overblown that the Federal Reserve's plan to aid the economy could unleash inflation.
Bernanke's comments come hours after the Fed announced Wednesday that it will buy $600 billion worth of government bonds in a bold bid to make loans cheaper, spur spending and invigorate the economy. Critics, including some Fed officials, fear that all the money being injected into the economy could ignite inflation or speculative bubbles in the prices of bonds or commodities. Bernanke said those inflation fears are "overstated." Bernanke revealed his thoughts in an opinion piece scheduled to be published Thursday in the Washington Post. - AP |
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pharoah88
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07-Nov-2010 14:07
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Fed move sparks backlash BEIJING “The international community has every reason to feel worried, so the US side owes it a proper explanation for the move,” Vice Foreign Minister Cui Tiankai was quoted as saying by the official Mr Cui’s remarks echoed concerns raised across Asia as countries brace themselves for stronger currencies and possible asset-price inflation, after the Fed announced it would sink money into government bonds over the next eight months to lower long-term interest rates in an effort to revive economic growth. China, Brazil and Germany criticised the action, and a string of east Asian central banks said they were preparing measures to defend their economies against a feared escalation of capital inflow into the region. A Chinese central bank advisor called unbridled printing of dollars the biggest risk to the global economy, and said China should use currency policy and capital controls to cushion itself from external shocks. “As long as the world exercises no restraint in issuing global currencies such as the dollar — and this is not easy — then the occurrence of another crisis is inevitable, as quite a few wise Westerners lament,” Mr Xia Bin wrote in a newspaper. Japan’s Prime Minister Naoto Kan cited the US as pursuing a “weak-dollar policy”. The Hong Kong Monetary Authority warned the city’s property prices could surge and Malaysia’s central bank chief said nations are prepared to act jointly on capital flows. Thailand’s finance minister Korn Chatikavanij said the country was prepared to introduce further capital controls, either alone or in cooperation with other countries. “We are willing to take whatever measures when necessary,” he told Reuters. Chinese central bank Governor Zhou Xiaochuan said Friday that while quantitative easing in the US was understandable because of its economy’s slow recovery, the policy might hurt the rest of the world. This debate highlighted the need for reforming the financial system, Mr Zhou said at a forum in Beijing. “If the domestic policy is optimal policy for the US alone, but at the same time it is not an optimal policy for the world ... we have to solve this problem by reforming the international currency system.” Asian stock markets climbed on Friday, as investors flocked to stocks and commodities in Asia for a second day in search of higher returns. Japan’s Nikkei share average led gains, rising 2.9 per cent. The MSCI index of Asia Pacific stocks outside Japan rose about 0.8 per cent. Hong Kong’s Hang Seng index climbed 1.4 per cent on strong turnover. The Shanghai Composite also rose 1.4 per cent to a near seven-month high. Key indexes in Taiwan and Australia rose more than a per cent, while stock markets in India and Singapore were closed for the Deepavali holiday. “We further increased our exposure to Asia and emerging markets. QE2 (quantitative easing 2) provides more confidence that the flow of capital into emerging markets will continue and add more liquidity into asset markets,” said Shane Oliver, director of investment strategy and chief economist for AMP Capital in Sydney.
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pharoah88
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07-Nov-2010 13:58
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Emerging markets slowdown ahead: HSBC HSBC Holdings, the UK’s biggest bank, said profit growth slowed in the third quarter and that recovery in emerging markets may be faltering. The rate of profit growth declined from the first half, though third-quarter profit was still “well ahead” of the year-earlier period as bad-loan provisions in the US declined, HSBC said. The lender did not providespecific figures. “Our latest data from emerging markets points to a slowdown in the rate of recovery and the likelihood of some bumps in the road ahead,” chief executive officer Michael Geoghegan said in the statement. “We believe the long-term fundamentals for emerging economies are as compelling as ever.” HSBC, which gets about two-thirds of its revenue from outside Europe, said loan impairments dropped to their lowest level since early 2007 after the bank shut its US consumer-finance unit.
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pharoah88
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07-Nov-2010 13:44
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Fed’s move likely to complicate US plan at G20
The renewed tension over the Fed’s move is likely to complicate US efforts to get G20 leaders meeting in Seoul next week to press China to sign up to a new accord promising to limit current account balances.
China’s Vice-Foreign Minister Cui Tiankai rejected any attempt by other countries to set target ranges for the yuan to appreciate.
“Of course, we hope to see more balanced current accounts,” Mr Cui said. “But we believe it would not be a good approach to single out this issue and focus all attention on it.
The artificial setting of a numerical target cannot but remind us of the days of planned economies.”
US Treasury Secretary Timothy Geithner last month floated the idea of capping surpluses and deficits on the current account at 4 per cent of GDP.
Asean will also raise its concerns at the Nov 11 to 12 summit.
“We are concerned that the US plan ... might lead to trade protectionism,” Thai Finance Minister Korn Chatikavanij said.
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pharoah88
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07-Nov-2010 13:41
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Is G20 SUMMIT an ILLEGAL and ILLEGITIMATE ASSEMBLY ? ? ? ? |
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pharoah88
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07-Nov-2010 13:38
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Is G20 a LEGAL and LEGITIMATE INSTITUTION ? ? ? ? |
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