Surplus countries key to economic revamp: Keating

Surplus countries key to economic revamp: Keating

www.abc.net.au

Former Australian prime minister Paul Keating says the current economic situation calls for an overhaul of the international institutions that lead economic policy.

Mr Keating told ABC 1's Lateline program that governments should move on from inter-government institutions such as the International Monetary Fund (IMF) and G7 to combat the global financial crisis.

He says China and India deserve more of a say.

"What we need is a completely new global political and economic settlement," he said.

"Get rid of the old G7. We've got to get rid of the old IMF. We've got to bring the surplus countries into the political framework.

"The G7 is made up of debtor countries, countries like the United States, Britain, France, Italy - these are all borrowers.

""There's no surplus countries in that. If you look at the structure of the IMF the Chinese get 3.7 per cent of the vote, the Indians get 1.9."

"The Europeans and the Americans get 51 per cent and there is just now way the Chinese communist party is going to hand over control of their currency and their political fortunes to a Washington-based, US Treasury run institution."

"So unless there is going to be a totally new settlement... we are not going to get out of this."

Mr Keating says he expects the effects of the economic slowdown will be felt for a long time.

"The United States is also going to go through a very long and deep recession and a massive period of adjustment and I'll be very surprised if this is any less than six or seven years," he said.

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I wish I'd been able to edit this title of this article to "China... our new economic ruler."

The video provided with this article is very good. Keating's contention that "We’re all going to be in this until there’s a restructuring of world power.." concerning China and the deficit countries. According to Keating, "It’s a catastrophe. It’s way worse than it appears.

The top 200 financial institutions in the world have suffered an average loss of value of 74 percent. What we need is a completely new global political and economic settlement. Get rid of the old G7, get rid of the old IMF, we’ve got to bring the surplus countries into the political framework. There’s just no way the Chinese Communist Party is going to hand over control of their currency and their political fortunes to a Washington based U.S. Treasury run institution. So this is going to be a complete resettlement. We’re not going to get out of this. The United States budget cannot reflect the world. We’ve always been in a situation where the United States budget could reflect the world. This is not going to happen now. See, the budget this year was gonna be $850 billion, now President Obama’s talking about another trillion, so $1.8 trillion. They’re GDP is $13 trillion so their running a budget deficit this year of 15% of GDP and they’ll do this for three or four years 16% of American GDP. Who’s going to buy the bonds? Every serious American policy maker knows that they’re not going to be returning value, in the end they’re going to inflate their way out… the debt will be so overwhelming that it cannot be repaid.”




www.abc.net.au
(visit the link for the full news article)

[edit on 2/2/2009 by Iamonlyhuman]

[edit on 2/2/2009 by Iamonlyhuman]

Actually, I'm going to ask to close this thread. The title just does nothing at all for the story and I feel very strongly that people should hear this information. I'm posting a new thread on it, titled the way I want it titled, in Global Meltdown section.