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>
> Hunter and Eric,

> What a wonderful description of politicl risk with awesome outcomes
> for failure and success. If we had the capability to do this from a
> standing start it could prove the most valuable trading survey in
> history. We are once again approaching the precipice of catastrophe
> with a repeat of the 1930's. I would prefer it not happen but if it
> does and we cannot find someone to pay for our product to stop it, I
> would very much like to be on the right side of the trade which
> would produce great opportunity to protect our futures.
>
> If this is not done right by the G-20 the national security
> implications to US would be much like England and would be the most
> dire since England faced German onslaught in WWII virtually alone
> and was left nearly bankrupt and vastly diminished. The US would
> have to face a stronger China with vastly diminished resources to
> offset China's rise. We are living through a most dangerous game of
> "currency war" as some call it but it goes far beyond currency.

> Michael
>
> India warns on damage from G20 tension
> By Lionel Barber and James Lamont in New Delhi and Chris Giles in
> London
> Published: October 19 2010 22:29 | Last updated: October 19 2010 22:29
> Manmohan Singh, India’s prime minister, has appealed for “a meeting
> of minds” at next month’s meeting of the Group of 20 leading
> economies to give renewed impetus to co-ordinated financial reform
> and the rebalancing of the global economy.
>
> “I’m worried about the global situation,” Mr Singh told the
> Financial Times.
>
> EDITOR’S CHOICE
> Doubts grow on prospects for G20 - Oct-19
>
> In depth: Currency wars - Oct-10
>
> Seoul says US holds key to trade deal - Oct-19
>
> Editorial Comment: Franco-German debt crisis deal - Oct-19
>
> China rate rise triggers market falls - Oct-19
>
> In depth: G20 - Jun-04
>
> The Indian prime minister’s concerns about the fraying cohesion of
> the G20 were echoed on Tuesday night by Mervyn King, the governor of
> the Bank of England, who warned that tensions over exchange rates
> could degenerate into trade protectionism.
>
> “That could, as it did in the 1930s, lead to a disastrous collapse
> in activity around the world,” he said in a speech.
>
> Indian officials have warned that the G20 is split between debtor
> countries, such as the US and the UK, and creditor nations, led by
> China with its large foreign exchange reserves. Undervaluation of
> currencies and monetary easing were complicating problems and
> leading to a dangerous divergence of opinion among global leaders.
>
> The officials said that the group, which came together two years ago
> to help stabilise the global financial system, had lost its
> cohesiveness as it approached the summit in Seoul, the South Korean
> capital. A “clash of interests and a clash of perceptions” could
> result in a stalemate at the summit that would impede progress
> towards recovery.
>
> “There’s no agreement on diagnosis,” one top official said. “We’ve
> lost consensus about how to tackle the situation. That’s my worry
> about the Seoul conference. The G20 is in serious difficulties.”
>
> International tensions over exchange rates have escalated ahead of
> the summit as some countries have engineered the depreciation of
> their currencies to sharpen their economic competitiveness. At the
> heart of the issue lies a long-running tussle between the US and
> China over the value of the renminbi, the Chinese currency, which
> the US argues gives unfair advantage to Chinese exports.
>
> The Korean hosts are aiming to create a new financial safety net for
> troubled governments and agree on banking capital accords.
>
> The Mumbai-based Reserve Bank of India officials are concerned about
> a growing disconnect between the flagging economies of the west and
> the faster growing developing world. They regard a wave of capital
> resulting from the ultra-loose monetary policies in advanced
> economies as having a potentially destabilising effect on emerging
> economies.
>
> In his speech, Mr King warned that tensions over exchange rates were
> hampering the necessary rebalancing of the global economy. The
> spirit of co-operation evident in late 2008, “so strong then, has
> ebbed away”, he said.
>
> “Current exchange rate tensions illustrate the resistance to the
> relative price changes that are necessary for a successful
> rebalancing. The need to act in the collective interest has yet to
> be recognised, and, unless it is, it will be only a matter of time
> before one or more countries resort to trade protectionism as the
> only domestic instrument to support a necessary rebalancing,” he said.
>
> Mr King called for a “grand bargain” among the major economic
> powers. This would include a commitment from China and other surplus
> countries to increase domestic demand and an agreement on exchange
> rates.
>
> Mr King hoped that if countries could agree the “right speed of
> adjustment” first, the growing tensions in the global economy could
> be averted with a grand bargain on other policies.
>
> The US is putting pressure on China to allow its currency to
> strengthen. China, however, has warned that should the US Federal
> Reserve pump more dollars into the markets through quantitative
> easing it will worsen imbalances and swamp emerging economies with
> “hot” capital inflows.
>
> Some economists expect China to move on its currency ahead of a
> visit by China’s leadership to Washington to ease tensions. But they
> argue that China is inflicting some of the worst damage on its low
> income neighbours.
>
> “A beggar thy neighbour attitude has taken hold,” said Hafiz Pasha,
> a leading Pakistani economist and former finance minister. “The
> space for growth is smaller and China is artificially taking up too
> much of that space.”
>
> “The Third World will gang up on it. We need to start complaining,”
> he said.
>
> Indian officials are emphasising their fast-transforming
> relationship with the US ahead of a visits by President Barack Obama
> to New Delhi, the Indian capital, and Wen Jiabao, the Chinese
> premier, before the end of the year. They say that the relationship
> with the US has “no irritants” like a hefty trade surplus or rising
> foreign exchange reserves.
>
> Moreover, there is a convergence of interests with Washington over
> issues such as global security in the Middle East and Central Asia.
> The firm footing of the relationship is expected to be underscored
> during Mr Obama’s visit with an agreement to buy arms from the US as
> India’s military seeks modernisation.
>
> Many analysts are watching carefully for any sign that India may opt
> for US aircraft in a deal to supply 126 jet fighters for the Indian
> air force. Such an arms contract would have big implications at a
> time when the Obama administration is trying to revive the weakened
> US economy and protect jobs at home.
>