“WASHINGTON (Reuters) - World leaders must defuse currency tensions before they worsen to avoid repeating the mistakes of the Great Depression, the head of the World Bank said on Thursday. The spirit of global economic cooperation, first forged in 2008 during the darkest days of the financial crisis, was weakening as the recession gives way to an uneven and shaky recovery, the head of the International Monetary Fund said. ‘If one lets this slide into conflict, or forms of protectionism, then we run the risks of repeating the mistakes of the 1930s,’ World Bank President Robert Zoellick told reporters at a briefing. ”
Personally, I think that “market sector” and world bank “government sector” power control and regulate the world currency problem. Fears of global currency and trade wars, which were key factors in the Great Depression, have jumped to the top of the agenda at IMF and World Bank meetings this weekend, and are also expected to be a primary topic of discussion when Group of Seven finance leaders gather on Friday. These meetings are expected to provide a forum for intense discussions about efforts to persuade China to let its currency rise and tamp down pressures for other emerging countries to control capital flows as the U.S. dollar weakens. Emerging markets are caught in the crossfire. Investors turned off by low returns in the United States and elsewhere are pouring money into fast-growing economies such as Brazil, driving up asset prices and inflation. Actions to control disruptive currency swings were understandable but over the medium term currencies would have to adjust to permit a necessary rebalancing of the global economy.
Post by: Ziying Yuan
http://abcnews.go.com/Business/wirestory?id=11822159&page=3
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