Saturday, November 13, 2010

REbalancing Currency Rates and World Economics

VPR News: Fed Moves Cast Cloud Over G-20 Economic Summit: "n the United States and some other mature economies, unemployment remains stubbornly high and growth is anemic, despite repeated efforts by central banks and government officials to stimulate demand, Prasad says.
U.S. officials blame that weakness on efforts by other countries -- especially China -- to keep their currency rates artificially low. This has kept Chinese imports cheap, short-circuiting the kind of export-led growth that American officials see as the way out of the country's problems.
'Just as the United States must change, so too must those economies that have previously relied on exports to offset weaknesses in their own demand,' President Obama wrote in a letter to G-20 leaders. What's needed, it noted, is a 'rebalancing' (this year's economic buzzword) of trade flows and currency rates.
'When all nations do their part -- emerging no less than advanced, surplus no less than deficit -- we all benefit from higher growth,' the letter read."

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