The Group of 20 meeting on Thursday struggled to agree on meaningful action to rebuild the global economy as a crisis erupted in Ireland, pushing its bond spreads out to a record over Germany, and infecting Spain and Portugal.
G20 club of rich and emerging economies had hoped to use the summit to soothe tensions over foreign exchange rates generated by imbalances between cash-rich exporting nations and debt-burdened importers.
But it emerged as a game-changing moment. Not only did President Barack Obama suffer a loss of face, but America’s leadership took a major hit. Following America’s catalytic role in bringing the global economy to the brink of disaster, followed by the Obama administration’s weakened political position after the Nov. 2 mid-term elections, the United States is now losing the global argument over what is the best development model for the 21st century.
The world believes that it must develop tools powerful enough to bridle the U.S. dollar and the people that manage it. That is why so many countries and organizations are considering a sovereign reserve currency to replace the U.S. dollar.
The United States is the one that must take the necessary steps to increase its competitiveness. The U.S. should not try to put limits on countries that have figured out how to get the world to buy their goods. “In the task ahead, the benchmark has to be the countries that have been most competitive, not to reduce to the lowest common denominator,” Ouch! — America being called “the lowest common denominator.” Let’s hope Obama and Geithner were listening because the world is no longer automatically following America’s lead. Will Americans, so used to thinking of themselves as the mightiest and the best, be able to adjust their attitudes to allow for the change that must occur?. It is becoming very very difficult in this world for making money. People should look to make money though additional ways
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