G20 - Another World Order

A month ago I wrote about: “How G20 should tackle this economic crisis”.
When the G20 meeting was in progress, I traveled around Europe, so I couldn’t comment earlier the results.

World leaders talked about a ‘new world order’ that should change the world, but they fell short to explain how that could be completed. The big question is: what could they have changed within a gathering of politicians so diverse as never before got together? The bad debt that is hold by the banks and (eastern) governments should be taken care of by the IMF while better (tax) regulations without many specifics should be put in place to avoid similar catastrophes in the future.

Economies are subject to ups and downs, called the sinus curve. Capitalism has a similar curve, in the up swing it is called the ‘creation’ or expansion of capitalism in the down turn ‘destruction’ or contraction. Once the market is overproduced the downturn ‘destruction’ sets in by eliminating all what is superfluous.  
In the G20 meeting factually nothing very important was agreed, as that people should be spared the destructive part of capitalism, once the creative had done its work, avoiding this downturn.
The IMF budget should be increased three times over, which was labelled the ‘One Trillion Dollar Deal’. Further Mr. Brown UK’s PM and chairman of the G20 defined this to be the ‘new world order’.

Besides this expression had been heard before about 20 years ago then expressed by Mr. Bush the First who declared the World order as:
•    One government governing the whole world.
•    One multi-national police force.
•    Harmonized tax collection.

After that came the war on terror and now we do have the war on Depression. Sounds great. And where is all this money coming from? Most likely contributed by the US the country more in dept than probably all the others. China came up with financing all this through a new currency from the I.M.F. the so-called SDRs, Special Drawing Rights. But this is too far fetched to become realistic, because the too many provisions that should be agreed upon.

These SDRs also should become the new reserve currency to replace the US Dollar. But before implementation we’ll first witness a barter system in which goods are exchanged against goods and services, rather than using the dollar as a common currency. At least countries selling raw materials to China, don’t want to be stuck with dollars that are rapidly falling in value. That’s one of the reasons why; much of he world wants to dethrone the dollar as reserve currency.

After hours of negotiations about financial regulations "The era of banking secrecy was declared to be over," as stated in the official communiqué issued at the end of the G-20 summit. They finally had agreed to a plan for a new, cleaner global financial system. In which China suddenly is considered a model country, even though its two so-called Special Administrative Regions, Hong Kong and Macau, are considered safe havens for tax evaders.
According to participants in the preparatory meetings leading up to the summit, the Chinese negotiators categorically refused to be placed on the gray list, let alone the black list of tax heavens. Otherwise, the Chinese would let this list idea fail. An outcome that France, for its part, was determined to prevent because French President Nicolas Sarkozy had boldly told his voters that he planned to wage a relentless battle against tax havens.
This list is complete nonsense said the Finance Minister of Luxembourg, it self a safe heaven. Diplomats after all believe that it might have been better to forget about the list altogether, especially as it is unclear what exactly will happen to the fiscal rogue states. As a matter of fact the closing communiqué of the London G-20 merely includes a vague reference to "sanctions."

Who cares about these lists? If I was the head of a small country, I would be happy to be on the list. I would tell the whole world that in my country, privacy and law are still valued higher than threats from bigger countries and governments. Being on such a list could very well be the best form of publicity for the services available. So, little countries don't have to worry, they will have a much better and brighter future ahead.

Concluding nothing very important has been accomplished, although the media made this a blown-up happening. It was said that the G20 meeting was going to change the whole world into the New World Order and more. But factually what could they change? Not that much if anything at all. More likely the G20’s intention is saving capitalism by putting additional money into the system and that is the only thing we actually don’t need.

As an example: The housing bubble was a sort of madness that caused people to do stupid things with their money. But now, the G20 are doing even stranger and crazier things! Spending money in the trillions, without we all would have been a lot better off. HYPERINFLATION is most likely the final result caused by all these interventions and bailouts.

Instead of injecting liquidity in the market it would have been wiser to restructure the market along innovative ways of thinking that will get us out of this economic mess, that was caused by people that were too greedy and not groundbreaking at all. All these hastily designed financial rescue packages are doomed to failure if not innovative approaches are implemented and applied. Stronger support for innovation in business, government and society in general should have been in the closing communiqué. However no word was spent about that.