Monday, April 6, 2009

Leaders and central banks in Russia, China, Malaysia, Indonesia, Thailand, and Kazakhstan have called for an international currency system.

Speaking on April 1 in advance of the G-20 summit in London, Russian president Dmitry Medvedev argued that the international finance system needed a “new construction” including “new currency systems”, saying that such a new system could be the purpose of a revamped IMF and World Bank. The IMF was originally founded in 1946 as the overseer of the Bretton Woods system, which from its founding until the 1970s tied the western world’s currencies to the US Dollar, which was in turn backed by gold. Russia’s proposal was for the new currency to serve as a reserve currency, one which would take the place of the dollar, euro, and other heavily-traded currencies as an international standard of exchange.

Medvedev’s comments are a reversal of Russian position from a lukewarm response following a looser outline for a worldwide currency by Kazakhstani president Nursultan Nazarbayev. On March 11, Nazarbayev suggested the establishment of the “acmetal”, a portmanteau of “acme” and “capital“, as a reserve currency replacing the ruble in international transactions, first for Central Asia and then worldwide. 1999 Economics Nobel laureate Robert Mundell, speaking to the Daily Telegraph, endorsed the idea, saying “It would be a very good idea if the G-20 took that idea up in London”.

2001 Nobel economics prize winner Joseph Stiglitz, meanwhile, said the new currency could come about quickly if it was based on an expansion of the IMF’s already established system of Special Drawing Rights, units of exchange used by the IMF which already have some of the features of currency. Stiglitz argued that, as the US dollar has become the standard global reserve currency, it has inadvertently created a system which hurts the world economy. “It’s a net transfer, in a sense, to the United States of foreign aid,” he argued, reasoning that when other countries purchase US dollars in order to use them on international markets (such as for the buying and selling of petroleum), they effectively give the US a zero-interest loan — sometimes at times when they can least afford it. Stiglitz made his comments as head of a United Nations panel of economists giving recommendations to address the global financial crisis.

In the weeks leading up to the G-20 conference, the People’s Republic of China also began discussing a new system for reserve currencies. In a March 23 speech, Zhou Xiaochuan, governor of the People’s Bank of China, endorsed a new reserve currency, saying “the desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies.” Zhou went on to endorse the expansion of the SDR system in the long-term creation of a reserve currency government by the IMF. While Zhou did not mention the US dollar specifically, analysis by Qu Hongbin, chief China economist for HSBC, for the Financial Times said that the speech “is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money”.

China holds $740 billion as assets; inflation in the US economy, which has been low in recent years, would directly cause those assets to lose value.

While the Chinese government has engaged in currency swaps with several other growing economies, such as South Korea, Argentina, Malaysia and Indonesia, the Chinese Yuan cannot be used itself as a reserve currency as it cannot be freely traded on the global market.

The Chinese-Russian proposal was not entered onto the agenda at the G-20 meeting itself. Nonetheless, British Prime Minister Gordon Brown said that the G-20 was open to considering the proposal if and when a detailed one is presented. United States President Barack Obama, meanwhile, endorsed the continuation of dollar supremacy, saying that the US dollar is “extraordinarily strong” and arguing that its strength was the result of the intrinsic stability of the United States economic and political system; US treasury secretary Timothy Geithner had, the week before, made comments that while he supported an expansion in the SDR mechanism he rejected the idea of a global currency. Rather than change the role of SDRs, the G-20 meeting instead added $250 billion in support to the fund backing SDRs.

After the G-20 conference ended on Thursday, Malaysia’s The Star BizWeek reported that the central banks of Indonesia, Malaysia and Thailand had endorsed the Chinese proposal. All three countries have close economic ties with China and suffered heavily from the collapse of their currencies in the 1997 Asian Financial Crisis; the sudden growth in the value of the US dollar relative to those countries’ native currencies sharply increased debt in Southeast Asia’s economies, leading to a wave of bankruptcies.

International reaction from other economies has been mixed and guarded. Luiz Inacio Lula da Silva, President of Brazil, said that the currency proposal was important to discuss but did not give extensive comment. And while UPI reports that India supported the SDR proposal at the G-20 conference, the Indian Press Trust quotes Indian Prime Minister Manmohan Singh as saying last month, “It is too early to talk about common currency.”

Calls for an independent global reserve currency are not new. In 1944, John Maynard Keynes proposed the “bancor“, a unit like the SDR supported by a basket of commodities. Keynes’ idea was rejected and the US dollar took the equivalent role under the Bretton Woods system. Keynes proposed that the bancor system would be reinforced by a tax on participating countries’ current accounts, the difference between their exports and their imports, in order to encourage balanced trade. Meanwhile, monetary unions have become more popular since the end of the gold standard, with most of the European Union now trading the euro, and several countries outside the EU using it as a de facto currency; five West African countries adopting the eco at the end of this year; and the African Union planning to introduce the afro in 2028. Proposals for a North American currency union based around the so-called “amero” have been frequently discussed as the focus of conspiracy theories in the United States, but none of the US, Canada or Mexico have actively pursued the establishment of any such monetary union, however the dollar is the currency of several Latin American countries.

Saturday, September 18, 2010

Chile is celebrating its Bicentennial, with several events that have been organized by the government for almost a decade. It commemorates two hundred years since the First Government Junta of 1810 was formed, starting the Independence process, that ended in 1818 after Bernardo O’Higgins proclaimed it.

The Bicentennial takes place on a holiday from September 17th until 21st. Sebastián Piñera inaugurated the official fondas (places where typical food and drinks of Chile are sold; similar to a tavern) earlier on Friday. Piñera also danced a “pie” of Cueca, Chile’s national dance, with Government Spokeswoman Ena Von Baer.

More than 60 thousand people gathered on Plaza de la Ciudadanía (Citizen’s Square) in Santiago to celebrate the Bicentennial. There was a projection of historical images that also contained a message from the trapped miners in Copiapó. A giant flag of Chile (18 meters of height, 27 of width; weighing 200 kilograms) was raised on the square on Friday morning.

Celebrations of the Bicentennial in Pichilemu started earlier this month. On September 2, two thousand people lined up in a formation to create the message “Viva Chile Bicentenario Cardenal Caro” on Pichilemu beach “Las Terrazas”. The message was used to create a postal stamp to be released worldwide. The event was promoted by the Government of Cardenal Caro Province.

Private schools in the city, such as Colegio Preciosa Sangre, prepared events specially for their students. On Thursday, “Fonda Don Vicente Nario” was opened on Preciosa Sangre. Several games were performed there on that morning, including “el emboque”, “ponerle la cola al burro” (to put the tail to the donkey), and others.

Another event on Preciosa Sangre took place on Thursday night, when students recreated scenes of the History of Chile, including: a tertulia featuring Manuel Montt (starred by Luis Rojas); a chingana (a popular tavern); and selected colonial professions, such as the “motero” (person who sold motemei and chestnuts).

The official fonda of Pichilemu, La Bombonera, was inaugurated on Thursday night by Mayor Roberto Córdova, who danced cueca with people who attended the event. According to Córdova, at least 30,000 people have arrived at Pichilemu as of Friday, and it is estimated that another 30,000 will arrive during the next three days.

A great event took place on Pichilemu beach on Friday afternoon. Chilean typical games highlighted the event. People danced reggaeton, Américo’s cumbias and cuecas, while others were swimming. The National Shoe Fair (Feria Nacional del Calzado) was established on Agustín Ross Hotel on Thursday, and will stay in the town until September 23rd. Alicia Grez, who works on a kiosk in the Pichileminian Craft Fair located in front of One Discotheque, said that “sales have been excellent,” and that “[they] won’t miss the possibility to experience such an event like this.”

Tuesday, February 13, 2018

In reaction to the downing on Friday night of an Israeli F-16 which was targeting some Iranian control systems located in Syria, the Israeli Air Force launched some hours later an air raid on 12 sites located in Syria, four of which are said to be Iranian targets near Syrian capital Damascus. An anonymous Israeli official has estimated that about half of Syria’s anti-aircraft batteries has been destroyed. On Tuesday, Damascus warned Israel that it will “face more surprises” if there’ll be more Israeli attacks on Syrian ground.

The Israeli F-16 was shot down by Syrian anti-aircraft forces. It crashed in northern Israel, according to Israeli media. The two pilots have managed to save their lives by ejecting themselves. They have been hospitalized, and one of them is reported to have been seriously injured. Although Israel has been carrying out dozens of air attacks on Syrian territory over the last year, this is the first time an Israeli plane is shot down by Syrian military forces.

This new attack by Israel is described as a “large-scale” one. It is said to be the most serious confrontation between Israel and Iran since the beginning of the Syrian Civil War in 2011. Both Israel and Iran are to some degree involved in the Syrian Civil War.

The downing of the F-16 happened after a reportedly Iranian unmanned aerial vehicle, which had been launched from Syria, entered the Israeli airspace in Golan Heights. The drone said to be Iranian was shot down by an Israeli combat helicopter. In response to the presence of the drone, Israel dispatched at least eight warplanes, including the F-16 shot down.

The Iranian Foreign Ministry spokesman Bahram Qassemi has waved the Israeli claim that the drone which was shot down by Israel was actually Iranian aside as “ridiculous”, saying Iran only provides “military advice” to Syria. Moreover, Qassemi pointed to the Syrian government’s and army’s right to defend themselves.

The Syrian state media organization, the Syrian Arab News Agency, reported in response to what they called “an Israeli act of aggression” — referring to the first Israeli air raid before the F-16 was shot down — the Syrian air defense shot down at least two Israeli planes.

However, this claim from Syrian side is denied by Israel Defense Forces spokesperson Jonathan Conricus, who says only one Israeli plane crashed. The Syrian state television has cited a military who claims the army base in the central region of the country has as well been hit by the Israeli attacks, as a result of which some Syrian militaries have been killed, according to sources in Damascus. In a statement, the Syrian pro-government military alliance has threatened to retaliate against Israel, accusing it of “terrorism”.

In a tweet, spokesperson Jonathan Conricus blamed Iran for what he called a “severe violation of Israeli sovereignty”. He also says that “the Syrians and Iranians, from our point of view, are playing with fire”.

On Saturday, Interfax reported that the Russian President Vladimir Putin and the Israeli Prime Minister Benjamin Netanyahu had a telephone call about the current situation, in which Putin urged Netanyahu not to let it escalate further. Netanyahu for his part has announced that Israel will do “whatever is necessary” in order to stop aggression.

[edit]

Thursday, July 3, 2014

Ian Narev, the CEO of the Commonwealth Bank of Australia, this morning “unreservedly” apologised to clients who lost money in a scandal involving the bank’s financial planning services arm.

Last week, a Senate enquiry found financial advisers from the Commonwealth Bank had made high-risk investments of clients’ money without the clients’ permission, resulting in hundreds of millions of dollars lost. The Senate enquiry called for a Royal Commission into the bank, and the Australian Securities and Investments Commission (ASIC).

Mr Narev stated the bank’s performance in providing financial advice was “unacceptable”, and the bank was launching a scheme to compensate clients who lost money due to the planners’ actions.

In a statement Mr Narev said, “Poor advice provided by some of our advisers between 2003 and 2012 caused financial loss and distress and I am truly sorry for that. […] There have been changes in management, structure and culture. We have also invested in new systems, implemented new processes, enhanced adviser supervision and improved training.”

An investigation by Fairfax Media instigated the Senate inquiry into the Commonwealth Bank’s financial planning division and ASIC.

Whistleblower Jeff Morris, who reported the misconduct of the bank to ASIC six years ago, said in an article for The Sydney Morning Herald that neither the bank nor ASIC should be in control of the compensation program.