The Group of 20 nations declared on Saturday there would be no currency war and deferred plans to set new debt-cutting targets, underlining broad concern about the fragile state of the world economy.”
—headline, Reuters, February 16, 2013
Whew, that was close…? But read the headline carefully and it’s clear that the G20 finance ministers and central bankers met in Moscow on Feb. 15-16 and decided…nothing, really. Well, what were they expected to do? Cens
ouring deflationary Japan for essentially going QE3 lite in a world
where the major currencies, i.e. viable reserve currencies, float freely* would
have been tantamount to telling it to give up monetary policy as a macroeconomic
tool. (And where was the G20 when Switzerland hard-capped the Franc?) And there’s
still plenty of time before the September G20 Summit, when the heads of state/government
have to make up their minds about what to do with the 2010 Toronto Summit
goals. But even the lead did not satisfy the copy editor, who must be being paid
by the eyeball, who jazzed ti up with “Brink.” Brink indeed.
* The Renminbi will only qualify as a major currency when it becomes a viable reserve currency.