from:
http://www.billcara.com/archives/2007/10/caras_commentary_chat_tues_oct.html#more
This morning, I happened to catch the televised conference in which US Treasury Secretary Henry Paulson expressed his desire for market-determined currencies, particularly with respect to China. From what I heard, Paulson believes that the Humungous Bank & Broker Club (HB&B) ought to hold the strategic control of economic power amongst nations. He flat-out stated that market determination of govt policy was a better solution than politically determined policies.
Clearly, Paulson and I live on different planets. When the desires and needs of the People cannot be translated into policy because HB&B has control, there will be trouble to follow. To wit: the credit market crisis that presently is out of control.
In fact, I'll go further, I don't like the road Paulson and HB&B is taking the world down. Markets are not free and transparent, and they don't always serve as an effective pricing mechanism, which has become crystal clear in recent months. As I see it, Paulson's kind of talk ought to be raising almost Hitler-level concerns.
Rather than market determined currencies, we desperately need a G-20 general agreement on currencies, ie, within universally accepted ranges, adjusted when needed. The G-20 includes the G-7 plus countries like China, India, Russia and Brazil (the BRIC economies). We need agreement by these countries, not agreement set inside the boardrooms of HB&B. As it stands, the futures traders at HB&B are now determining whether or not a manufacturer/exporter can make a profit, depending on the country or countries where they happen to be operating. I find that completely unacceptable, and I hold these bankers (remember, Hank Paulson was the most powerful banker of them all until he took control of the US Treasury) at fault. We need the Finance Ministers and central bankers of the G-7 and G-20 to show some balls here before Paulson's crowd puts the game completely under their control.
