Analysis: G20 Proximity Talks Needed to Avert FX War

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U.S. is currency war's "tomb maker": China economist

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The United States fired the first shot in the currency war and the rest of the world must be on guard for its deliberate strategy to devalue the dollar, a Chinese economist said in an official newspaper on Thursday.

In a front-page commentary in the overseas edition of the People's Daily, Li Xiangyang described the United States as the conflict's "first maker of tomb figures," a Chinese idiom that means someone who creates a bad precedent.

Li, head of the Asia department at the Chinese Academy of Social Sciences, a top government think tank, said continued intervention in currency markets by developed economies would deal a blow to global economic recovery.

Chinese leaders have warned before that loose monetary policies in the United States pose a serious challenge for emerging markets, but rarely in such strident language, a window onto the rising anger in Beijing.

Seoul hopes 'COEX Accord' to bring peace to currency war

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An increasing number of experts point out that the currency war involving the world’s economic powerhouses is developing into a “prisoner’s dilemma” scenario — each player does its best for its own benefits but the overall result is less than that desired.

They claim that Korea can play a pivotal role in resolving the stand-off as the host of the G20 summit, which will bring together heads of 20 nations to COEX in southern Seoul midway through next month.

“Countries around the world have intervened to depreciate their currencies of late, creating a lose-lose situation, which is very similar to the prisoner’s dilemma,” professor Yun Chang-hyun at the University of Seoul said.

This is happening.

hello, my brothers..
good to know you're into this ,,,it's a race to the bottom!! also, the us has agreed to no qe if china lets it's currency go up... but it's a race to weaken the currency's...the us has been ahead of the game for 4 decades, and has a commanding lead. also, any country that doesn't trade with the us dollar gets invaded.

What do you anticipate happening in the next two years, if this has been going on for the last forty?

G20 finance ministers plan to head off global currency war amid growing trade tensions

Finance ministers from the Group of 20 nations are hoping to head off a global currency war this weekend by agreeing not to "competitively undervalue" their respective currencies.

George Osborne and Timothy Geithner, the United States' Treasury Secretary, will meet their counterparts from China, India and Japan on Friday in the South Korean city of Gyeongju for the latest round of G20 talks. The threat of a 'currency war', with countries jockeying to devalue their currencies in order to boost exports, is squarely at the top of the agenda.

G20 tomorrow, lets see what happens.

G20 summit struggling to avert currency war

UPDATE

FINANCE ministers from the Group of 20 nations struggled on Friday to agree on how to prevent a currency war, with the United States switching tack to focus on a way to rebalance global trade.

With China refusing to allow the yuan to rise more quickly, the US shifted the debate on the first day of the G20 summit to address trade imbalances, the root issue behind exchange rate clashes.

But as the first day closed, there was little sign currency issues would be resolved. With scepticism growing over the G20's ability to iron out problems, South Korean President Lee Myung-bak, who is hosting the summit, warned ministers if they did not reach a compromise ''we may not operate bus, train or aeroplane services to take you back home''.

Hmm... least there is one big thing to come out of the currecny war...

G20 takes steps to end currency war

SOURCE

OFFICIALS from the world's 20 biggest economies have promised to refrain from a currency war and agreed on new steps to reduce ''excessive imbalances'' in trade flows, an underlying source of currency tensions.

Officials have also decided to give fast-growing countries a greater say in the International Monetary Fund, which monitors nations' fiscal and monetary policies, and to strengthen the fund's role in assessing whether Group of 20 members are meeting their commitments.

WAR AVERTED?

Seems like the G20 has done what it set out to do... wonder what to expect next? Also, I think it says a lot that they had this meet in Korea to avoid protests like in the previous summits.

Is the currency war a cover for more critical matters? What realy has been decided this weekend?

Looks like are leaders are coming back afer all