Obama Moves The Earth for G20

In preparation for the upcoming G20 summit, President Obama has had the earth moved.

An earthquake has rocked buildings and sent people fleeing into the streets in an area ranging across a large swath of Central Canada and the U.S.

There also reports that the quake was felt in Montreal, Windsor, Ottawa and Toronto. New York City and parts of several U.S. states also felt the tremor.

Natural Resources Canada has confirmed a "minor" quake struck the region.

According to the U.S. Geological Survey's National Earthquake Information Center, the quake measured 5.5 in magnitude

Who says power hasn't gone to his head? 

Here's some video of the tremors.

Obama - taking credit.

I warned about this.  Don't let Obama take credit for change he did not affect.  So far, all that's really happened since the election in the economic downturn, is a lot of talk and a few TARP funds (which came from Bush/Paulson) got released.  But the market is turning up.  Recovery might be on the way.

Certainly that's what President Obama wants you to believe. We've turned a corner thanks to him.

LONDON (AP) - Concluding his first international summit, President Barack Obama hailed agreements at the emergency meeting of world powers Thursday as a "turning point in our pursuit of global economic recovery." The new U.S. leader said the heads of industrial countries that met in London agreed on "unprecedented steps to restore growth and prevent a crisis like this from happening again."

But if the recovery has started, it has nothing to do with the efforts of Obama.  At most he can claim that he provided "hope".  So far, as far as the economy is concerned, he has provided imagery, not "change".  Yes, he's promised things.  Dangerous and economically hurtful things. But promises do not turn a world economy around.

No doubt he will get all the credit though, unless private citizens ensure they explain the truth to the believers that Obama is not a Magic Genie. 

G20 - relevant?

Is the G20 a relevant entity? First off, of whom does the G20 consist? Alphabetically; Argentina , Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States. That adds up to 19. The European Union is also represented as the 20th entity. The G20 represents a significant portion of the globe both geographically and economically. Combined it represents 85% of the earth's GNP. From those perspectives, it's certainly relevant.

But what are the objectives of of the G20? According to Wikipedia,

The G-20 is a forum for cooperation and consultation on matters pertaining to
the international financial system. It studies, reviews, and promotes discussion
among key industrial and emerging market countries of policy issues pertaining
to the promotion of international financial stability, and seeks to address
issues that go beyond the responsibilities of any one organization.

That's all well and good, but U.K. new source The Guardian has reported that things seem to already be dividing into camps with differing agendas;

Angela Merkel, the German ­chancellor, and Nicolas Sarkozy, the French ­president, will throw down the gauntlet today by staging a joint press conference in ­London demanding the G20 summit usher in a new era of global regulation of banks, ­executive bonuses, hedge funds and offshore tax havens.

In what will be seen as a challenge to Obama, they will also insist nobody at the summit should discuss a fresh stimulus package, despite a report from the ­Organisation for Economic Co-operation and Development that "world trade is now in free fall".

Germany and France have of course shifted towards more conservative governments. But that does not mean that they don't have a Euro-centric agenda. Meanwhile, bucking the trend of other countries, the United States has lurched violently leftward. President Obama has met with British Prime Minister Gordon Brown and forged an uneasy alliance. Russia and China, for selfish reasons are looking to move away from the greenback as the world's currency reserve. The point here is that with so many participants and so many views on the challenges of the recession, it's unlikely that a true consensus of opinion is achievable. The G20 risks becoming what the U.N. is in terms of it's value to the United States - negligible.

I can't see Saudi Arabia willingly signing on to a real free trade agreement. I can't see China agreeing to tougher copyright law enforcement, or Russia agreeing to committing funding to the IMF. So why talk to them about things that for the foreseeable future, they will remain intransigent about?

Back in the late 90's the G20 was in fact the G9. Those countries had common economic goals, views and Geo-political interests. What may be of more value to the United States is a re-trenching back to that level of commonality where effective and mutually beneficial decisions can be reached and common approaches to the resolution of problems can be enacted.

Is The Global Currency Reserve A Done Deal?

A U.N. panel of economists is attempting to steer the world away from using the American dollar and towards a global currency reserve. The plan is supposedly designed to help jump start the economies of prosperous nations and prevent future global economic crises. Fools.

Whether the international currency reserve changes or not will not have an impact on future crises. Let me explain something to these economists. Crises have occurred throughout history. No matter what action is taken now, at some point future economic downturns, and yes crises, WILL occur. Why?

As the saying in Ecclesiastes 3:1 goes, "To everything there is a season, and a time to every purpose under heaven."

In other words, there are bulls and there are bears, there are periods of prosperity and periods of poverty. There are times of war and times of peace. Thinking that some new economic plan can change the ebb and flow is ridiculous. You can't stop the tide. As economists you should no better than to make such a foolish statement.

When I was younger, I saw Star Wars with my father, a civil engineer. We watched Luke Skywalker speeding through the desert in his hovering vehicle (apologies to all Star Wars geeks - I loved the series but I don't recall what the vehicle was called). My father casually observed, "a vehicle floating like that is impossible". I had to admonish my father - I told him as an engineer he should know better than to make a statement like that. Nothing is impossible. Something might not be technically feasible currently, but that doesn't mean some day it wouldn't become a reality. Look at flight, space flight, computers, lasers, and even television. 200 years ago all would have been considered impossible.

My point is that making such blanket statements is foolish. No matter what economic 'solutions' these economists bring to the table, economic hardship has always occurred. For the foreseeable future, it always will occur. [Avoided falling into my own trap there.]

Getting back to the dollar, is dumping it a good idea? There are pros and cons to America in doing so. But the reality is, even after Geithner's silly stumble, he was reasonably quick to correct himself and state that for the foreseeable future, the dollar would be the international standard currency reserve. So is the global currency reserve or the basket currency China had been suggesting a done deal? Hardly. Is it something likely to be argued at the upcoming G20 meeting? For sure. But at this point I don't see the change coming. Perhaps things would have been different if the Dow had continued to fall and was below 5000, and similar struggles were snowballing in other countries at the rates they were back in Q4 2008. But my gut feeling is that the talks about changing the currency, regardless of what Russia, China and France might say, will not gather any momentum. I could be wrong, but I don't see this as being Bretton Woods redux.