G20 – The dawning of a new world order.

Monday, March 30, 2009

The thing about big conferences involving world leaders is that everyone is so proper and polite in front of one another. British Prime Minister Gordon Brown is lobbying the world for a new world order along with President Barack Obama. They are proposing a 1.7 Trillion Dollar global stimulus plan for the world to follow, the trouble is over the weekend news broke that the world is not into that idea. France, Germany, Spain, Russia, China, have all made statements questioning the idea of such a global spending effort – some classifying it as counterproductive.

The Canadian Prime Minister was on American Television on Sunday being very diplomatic in his discourse. He said that he needed to review the proposal and that certain things needed to be ironed out before a “meaningful discussion could be had on the issue” – in plain English, the G20 will not yield any fruit on Brown and Obama’s plans. The few things needed to be ironed out are this – FIX YOUR BANKS FIRST, SHOW US THAT THEY ARE GOOD AND SOLVENT, THEN MAYBE WE CAN TALK ABOUT YOUR IDEA.

The Online Forex world knows this to be true. And the erratic trading on the dollar and pound have proven that there are many skeptics out there with regard to the G20 and what it will produce. Aside from some smiley pictures, a few days in cloudy London and some good old Scotch, what can these leaders say they came home with? I do not believe they will come home with much.

It is going to be a slow week up until the summit on Wednesday – light volumes and erratic swings will be the norm (unless someone big makes a gaffe like Geithner or Brown did last week). I also believe that the world is in for a shock when they see what all the spending and currency manipulation has done to the two staple currencies, the Pound and the Dollar. The Pound used to trade at over $2 to the Dollar and now it is hovering around $1.40 – this is a big drop. And the US Dollar is almost at parity with the Canadian Dollar – this used to be the butt of many jokes about Canada back in the day when I first started out. But now the two are neck and neck – it used to be .60 cents on the dollar for the Canadian currency. Perhaps we are in for a new world order. Perhaps we are in the midst of history in the making.

Hang on.


About This Blog

Get the latest Forex online news and updates right here at one place.