Seoul G20 flops.
currency
Failure in waiting: Harper's hand on the China-U.S. currency dispute
The just concluded Seoul G20 summit has failed.
The U.S. says China won't play fair with its currency market, but neither do they
In the 1970s it was Germany. In the 1980s it was Japan. Now, apparently, it is China that is responsible for U.S. economic woes.
Appearing before Congress, U.S. Treasury Secretary Geithner pointed the finger at China, accusing them of currency manipulation. Congress has called upon the president to bring in tariffs aimed at reducing Chinese manufacturing exports. The presidential report specifying "Section 301" measures is expected in November.
Liberal economist and New York Times columnist Paul Krugman opines that by not allowing its currency to appreciate, China is refusing to play by the same rules as everybody else.
No analysis of 'Greeks bearing debts' story
Facing a major crisis, the European Union and the European Central Bank (ECB) have combined to support Greece and other southern European countries under attack from speculative finance. In an unprecedented move, the ECB has agreed to guarantee the value of debt issued by euro-zone members, and to intervene in bond markets as necessary. The EU has mobilized loans and credit facilities of nearly 1 trillion euros to support the European bond market.
Canada's oil: For sale to the highest bidder
Want to know why Canada's currency is sky-high despite our sluggish recovery, our large and persistent current account deficit, and our lousy export performance?
Check out this fascinating story in Friday's National Post, by Yadullah Hussain, on why Canada's oil reserves are such a uniquely hot commodity in the eyes of global oil corporations.
The oil price-loonie transmission mechanism
The most interesting comments from Bank of Canada Governor Mark Carney last week, in releasing the Bank's semi-annual Monetary Policy Report, dealt with the relationship between the price of oil and the Canadian currency. The Globe and Mail reported Carney as publicly questioning why currency traders automatically presume such a direct link between the loonie and the world oil price. After all, he accurately pointed out, Canada produces a lot more than just oil.
There's the loonie, there's the toonie -- but are you ready for the 'harpie'?
The Harper government plans to issue a new $5 coin from the Royal Canadian Mint with the profile of Stephen Harper sharing space with that of Queen Elizabeth II, according to documents shown to rabble.ca.
The move will be part of major changes to Canada's currency system if the Conservatives succeed in gaining a majority in Parliament in the federal election. Canadians go to the polls on May 2.
The coin will be legal tender similar to the $1 and $2 coins, the loonie and toonie. Insiders have already nicknamed the $5 coin "the harpie," after the prime minister.
It will be the first time a Canadian prime minister has been coupled on a coin this way with the Queen, who is Canada's head of state.
Chinese challenge the U.S.
Just before U.S. President Obama arrived in China, his hosts proffered an outspoken criticism of the negligence of the U.S. in allowing their currency to promote speculative finance. Specifically, the Chinese object to the U.S. turning a blind eye to the "carry trade." This is a practice whereby hedge fund operators borrow U.S. dollars at low U.S. interest rates, and invest in high interest securities in currencies with higher interest rates. As the U.S. dollar slides lower, the hedge funds also gain the difference in capital appreciation of the rise in the value of the target currencies against the dollar.
