G20 leaders seal $1.1tr global deal

Teki187

Teki187

Teki187

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Leaders of the world's largest economies have reached an agreement to tackle the global financial crisis with measures worth $1 trillion (£681bn).

To help countries with troubled economies, the International Monetary Fund (IMF) will get extra resources worth up to $750bn.

There will also be sanctions against secretive tax havens and tougher global financial regulation.

And the G20 has committed about $250bn to boost global trade.
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Source - http://news.bbc.co.uk/1/hi/business/7979483.stm

Please read the full story on the BBC website (linked above).

There are several key issues to be brought into prominence.

1. The IMF has been seriously strengthened, and has the power to issue more loans than ever before.

The IMF will engage in lending:

$500bn for the IMF to lend to struggling economies
$250bn to boost world trade
$250bn for a new IMF "overdraft facility" countries can draw on
$100bn that international development banks can lend to poorest countries
$6bn increase in lending for the poorest countries.

2. The IMF's special basket currency, known as "Special Drawing Rights", will be used to denominate $250bn of overdraft rights for countries to borrow against. The use of the SDR as the prominent lending currency as opposed to the US dollar is a sign that the global economy is shifting towards the usage of a new global currency.

You can read about the SDR here: http://en.wikipedia.org/wiki/Special_Drawing_Rights

What does this mean for the world?

1. A more globalised economy
2. A more interconnected financial lending system, surrounding the IMF
3. A new global currency in the making ?
4. Massive amounts of new money via lending to central banks, then through subsidiary banks and commercial banks- with leverage used on every step. Most countries maintain a tier1 capital ratio of between 5-10%. This means that we are looking at a global stimulus of between 10 and 20 trillion USD. Expect inflation.
5. The rise in prominence of the G20- a group of the most powerful economies in the world
 
Channel 4 news last night had a former IMF man and Lord Peter Mandelson on. The IMF man said some Western Europe countries - including the UK - might need IMF money. Mandelson didn't deny it, just said we wouldn't be top of the queue. He then went on to try and 'de-stigmatise' receiving money from the IMF.
 
clv101 said:
Channel 4 news last night had a former IMF man and Lord Peter Mandelson on. The IMF man said some Western Europe countries - including the UK - might need IMF money. Mandelson didn't deny it, just said we wouldn't be top of the queue. He then went on to try and 'de-stigmatise' receiving money from the IMF.
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Yup, we’ll be out with the cap and begging bowl, then tax, tax, tax.
 
It really is ingenious, one of the problems was lending to much countries having too much official debt and economies simply being weak. So what will this money do, it will be used as loans to pay off debts the country can't sort out. Essentially its JSA taken to an international level. No actual fixing of economy's, no real boosting exporting or production of anything, just wishful thinking by completely retarded idiots.

Screams of an Obama/Brown plan and really both should be freaking shot, complete idiots who are both convinced that pumping new money into everything will somehow increase the number of jobs, industry, output, export and GDP in a country, which it won't, it will simply leave them further in debt in deeper trouble with more companies letting more people go.


I don't know whats worse, knowing Brown is completely useless, retarded and dangerous but having no say in him getting into power, or obliviously voting Obama in on promises he kept changing with no proof of his ability to lead of fix the country just to find out he's an empty suit with all the wrong people around him making everything worse.
 
Teki187 said:
1. A more globalised economy
2. A more interconnected financial lending system, surrounding the IMF
3. A new global currency in the making ?
4. Massive amounts of new money via lending to central banks, then through subsidiary banks and commercial banks- with leverage used on every step. Most countries maintain a tier1 capital ratio of between 5-10%. This means that we are looking at a global stimulus of between 10 and 20 trillion USD. Expect inflation.
5. The rise in prominence of the G20- a group of the most powerful economies in the world
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1. Was almost always likely to happen anyway.
2. Logically follows on from #1.
3. I'm not so convinced by this, a lot of money can be made (and lost) by trading on various currencies plus one global currency ignores that individual economies are not all created equal and even if they converge in worth for short periods will inevitably diverge again.
4. From my limited understanding this was pretty much inevitable when your solution is to 'throw' money at the problem, if you create massively more of something then you will, in a corollary effect, devalue the rest.
5. They're already pretty powerful, I'm not sure how much more prominent they become.
 
Great news - amazing job by Gordon Brown to get an agreement from 20 different nations for a global solution to this economic crisis. Hope that this agreement will be the death-knell for the sort of anglo-saxon free market economics that have got us into this mess. If implemented properly we should see a very different sort of globalised trade that will be more just and sustainable.
 
Iraklis F.C. said:
loans loans loans loans...were in debt up to our necks
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Taking on my debt is a gamble, it's a bet on future growth. The only way this ends well is if growth resumes. The problem with this is that we are likely close to the limits to growth - there isn't much more growth in energy possible, this isn't much more growth in agricultural output possible etc.

If we're close to physical limits, growth isn't going to be possible. It seems there is no plan B for a non-growth future.
 
I don't understand why people keep insisting there is going to be a "global currency". There is too much money to be made in the trading over currencies and not all countries are economically equal. It wouldn't work until everyone was up to the same pace/standard and that will never happen.

It may sound nice as part of the NWO conspiracy but it has no practical use.
 
clv101 said:
Channel 4 news last night had a former IMF man and Lord Peter Mandelson on. The IMF man said some Western Europe countries - including the UK - might need IMF money. Mandelson didn't deny it, just said we wouldn't be top of the queue. He then went on to try and 'de-stigmatise' receiving money from the IMF.
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Labour would love taking the begging bowl to the IMF to be de-stigmatised, it always happens during or following them being in power...

Trying to de-stigmatise economic incompetance would do wonders for Labour's image :)
 
no mention of the removal of the mark-to-market rules yesterday - now banks can value their assets to what they want them to be and inflate their profits on that basis - insanity.
 
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