Obama Strategy for G-20 in Ottawa: Attack Germany, and Keep Toxic Derivatives in Charge of the World Economy!

With Obama’s letter to the G-20 countries released at the end of last week, the US strategy for the upcoming Ottawa summit is clear: Obama will attempt to sabotage the meeting with a two-pronged attack designed to knock China and Germany off balance, and to prevent any urgent measures from being discussed which might roll back the exorbitant proliferation of derivatives, impose a Tobin tax on speculators, or regulate and restrain the hedge fund hyenas whose activities are ravaging the globe.

Obama, as usual, operates under a veil of dissembling and deception. His letter talks first of all in edifying terms about the priority which must be given to economic recovery and growth. He says he wants to encourage the growth of internal consumption, especially in countries with large trade surpluses, meaning China and Germany, or possibly Japan. He sheds crocodile tears about the drastic austerity policies of the type being introduced by the Merkel government in Berlin. He tells countries which have built their strategy around exports that it is unwise to rely on exports.

Much of this represents an attempt to prevent the Germans from bringing up the issues that are important to them and to the world, such as the need to restrain over-the-counter derivatives, especially the extremely toxic naked credit default swaps which Berlin has now banned in regard to government bonds denominated in euros. Obama does not want to hear about the German government’s plans for a Tobin tax on speculative turnover. He also wants to divert attention away from the European Union efforts to regulate and restrain hedge funds, which have played a prominent role in exacerbating the current world economic depression. Continue reading Obama Strategy for G-20 in Ottawa.more

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