G20: Who will be in charge?

Market Leader informed

The world’s leading states have recently gathered at the G20 summit in Seoul, South Korea. Previously thePresident of France Nicolas Sarkozy said that G20 is a new model of world management in the 21^st century. However, some analysts that feel skeptical about G20 call it a model of international disputes of the 21^st century as every day the amount of those who want to be in charge of the global economy growths while the economic stability in the world deteriorates.

It may seem that the Chinese-American disputes should have divided the world in half (2 camps). However everything is not that simple. Analysts have found out other axes of disagreement.

Confrontation of “deficit” and “surplus” countries. The “deficit” ones call upon considering the imbalance problem while the “surplus” ones question the reasonability of such discussions. Germany’s tough stand should be paid special attention to. It opposes the USA’s economic approaches, which imply working out the target levels for the current balance deficit.

Opposition of the manipulated and manipulators: The USA says China manipulates its national currency, deliberately devaluing it. China providing counter arguments saying the US itself “has been at the cookie jar” (hinting at the money printing press and the excessive amount of dollar bills it prints).

Opposition in terms of political disagreement: Democracy is up against authoritarian states. There are only 2 authoritarian states among the members of G20 – China and Saudi Arabia. Russia balances between democracy and authoritarian system.

Interventions and noninterference policy: It is necessary to consider the global question of whether it is necessary to adopt an agreement which forces to comply with it or the process should be optional. Both China and the US share the opinion on the matter as they do not strive to burden themselves with restrictions of new international conditions.

The senior versus the junior: the oppositions emerged as soon as G20 was formed… between the elite (the invited countries) and the other 170 states that were left “waiting in the hall”, so to say. Of course, it is believed that the participation of the World Bank and the IMF makes up for it. Nothing doing!  As a result the countries not included in G20 express growing discontent with the “senior” countries as the latter claim to be “the management committee of the world”.

So, everyone wants to be in charge of the global economy. However they should be careful to avoid worsening the situation.

Maxim Gun, the head of the Volume Analysis Department of Masterforex-V Academy, notes that from the standpoint of tech analysis, EURUSD and 6ECONT indicate downward dynamics, having settled below the 1.3920 level (60.000 lots) of the current contract.

 

 

 

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