In a joint meeting of totally useless finance and labour ministers, the G20 Seeks to ‘Double Down’ Against Devaluation
There is a shared belief among the members of the Group of 20 leading economies in the need to “double down” against competitive currency devaluation and avoid it in both policy and language, a senior U.S. Treasury official said on Saturday.
Speaking to reporters on the sidelines of the G20 meeting of central bankers and finance ministers in the Turkish capital Ankara, the official said the final communique from the meeting was expected to address competitive devaluation, where countries attempt to drive down a currency to boost exports.
“There is a shared sense that the G20 needs to double down on its principle that competitive devaluation is a bad thing.”
Currencies have come into sharp focus at the G20 meeting, after China devalued the yuan in a surprise move in August, sparking market turmoil.
G20 Hypocrites Translated
The G20 believes the yuan should go higher.
That’s quite a collection of clowns all in one place. All they lack is ample makeup. If those hypocrites actually believed what they stated, QE would go out the window in a second.
ECB president Mario Draghi is the top clown at the moment. He hopes to drive the euro lower to increase inflation. His method of choice is QE rather than a peg or fixed rate of exchange.
For some reason QE is an acceptable means to drive a currency lower, but China’s peg is not. The irony is the yuan might plunge if China floated it as the G20 and US treasury wants.
Mike “Mish” Shedlock