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16-Nov-2010 12:17

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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LARGE-SCALE AND PERMANENT
The final option is massive, large scale and permanent sterilised intervention — or, equivalently, the use of sovereign wealth funds or other fiscal-stabilisation mechanisms — to accumulate the foreign assets needed to compensate for the effects on the currency’s value brought about by long term inflows.
The argument for this option is that long-term secular factors are important drivers of capital inflows, as advanced economy investors discover that they are underweight in emerging-market assets and reduce their portfolios’ “home bias”.
Sterilised intervention usually does not work: If assets in advanced economies and emerging markets remain perfectly substitutable, inflows will continue as long as interest-rate differentials persist. But the demand for emerging-market assets is neither infinite nor perfectly substitutable for the assets of advanced economies — even for given interest-rate differentials — because these assets have very different liquidity and credit risks.
This means that at some point largescale, persistent sterilised foreign-exchange intervention — amounting to several percentage points of GDP — would satisfy the additional demand for emerging-market assets and stop the inflows, even if interestrate differentials remain.
As sterilisation induces issuance of domestic assets, global investors’ desire for diversification would be met without causing excessive currency appreciation, with all its collateral damage, in emerging markets.
Of course, currency appreciation should not be prevented altogether. When justified by economic fundamentals, the exchange rate should be allowed to rise gradually.
But when a currency’s appreciation is triggered by capital inflows that represent the asset-diversification preferences of advanced-economy investors, it can and should be resisted. PROJECT SYNDICATE
The writer is professor of Economics at the Stern School of Business, NYU and chairman of Roubini Global Economics. This column is based on a longer research paper titled “How Should Emerging Markets Manage Capital Inflows and Currency Appreciation?”
Available at http://www.roubini..com/analysis/137656.php

REAL CURRENCY EXCHANGE RATES MUST RISE CORRESPONDINGLY WITH ITS BANK DEPOSIT INTEREST RATES

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16-Nov-2010 12:10

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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G20 AGREED TO MEET & WAIT and MEET & WAIT and MEET & WAIT . . . .

sO EVERYBODY WAITS and WAITS and WAITS . . . .

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16-Nov-2010 12:05

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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* I N C E P T I O N *

wIth ^20 HANDS^

In One HOLE

nObOdy wIll take respOsIbIlIty

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16-Nov-2010 12:02

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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wIth addItIOnal ####12 HANDS####

It wIll be

THE END Of THE HOLE

pharoah88 ( Date: 16-Nov-2010 11:58) Posted:

The ORIGINAL #8 HANDS#

already made the HOLE

VERY BIG.

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16-Nov-2010 11:58

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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The ORIGINAL #8 HANDS#

already made the HOLE

VERY BIG.

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16-Nov-2010 11:56

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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Nouriel Roubini

In the past year, the world has seen another boom, with a tsunami of capital, portfolio equity and fixed-income investments surging into emerging-market countries perceived as having strong macro-economic, policy and financial fundamentals.

Such inflows are driven in part by short-term cyclical factors (interest-rate differentials and a wall of liquidity chasing higher-yielding assets as zero policy rates and more quantitative easing reduce opportunities in the sluggish advanced economies).

But longer-term secular factors also play a role. These include emerging markets’ long-term growth differentials relative to advanced economies; investors’ greater willingness to diversify beyond their home markets; and the expectation of long-term nominal and real appreciation of emerging-market currencies.

Given all this, the most critical policy question in emerging markets today is how to respond to inflows that will inevitably drive up their exchange rates and threaten export-led growth.

The first option is to do nothing and allow the currency to appreciate. This may be the right response if the inflows and upward pressure on the exchange rate are driven by fundamental factors (a current account surplus, an undervalued currency, a large and persistent growth differential).

But, in many cases, inflows are driven by short-term factors, fads and irrational exuberance, which can lead to an overvalued currency, the crowding out of non-traditional export sectors or importcompeting sectors, a loss of competitiveness, and eventually a large current account deficit and thus tighter external constraints on growth.

This problem is exacerbated by the fact that the world’s biggest exporter, China, is aggressively intervening to minimise any appreciation of the yuan. If China doesn’t allow the yuan to strengthen, other emerging markets will remain wary of letting their currencies appreciate too much and lose competitiveness.

If allowing a currency to appreciate freely is costly, the second option is unsterilised foreign-exchange intervention. This is effective in stemming upward exchange-rate pressure but it feeds the beast: It exacerbates overheating in already fast-growing emerging markets, causing inflation and leading to excessive credit growth, which can fuel dangerous asset bubbles.

The third option is sterilised intervention. This prevents monetary and credit growth but, by keeping interest-rate differentials high, sterilised intervention feeds carry-trade inflows, thus contributing to the problem that it was supposed to solve.

The fourth option is to impose capital controls on inflows (or liberalise controls on outflows). Leaving aside the issue of whether or not such controls are “leaky”, evidence suggests that controls on inflows of short-term “hot money” do not affect the overall amount of capital inflows. Thus, such controls are ineffective in reducing short-term cyclical pressure on the currency to appreciate.

The fifth option is to tighten fiscal policy and reduce budget deficits with the aim of lowering the high interest rates that drive the inflows. But sounder fiscal policy might lead to even higher inflows as the country’s external balance and sovereign risk outlook improve.

A sixth option — especially where a country has carried out partially sterilised intervention to prevent excessive currency appreciation — is to reduce the risk of credit and asset bubbles by imposing prudential supervision of the financial system.

This should be aimed at restraining excessive credit growth, which the monetary growth that follows currency intervention would otherwise cause.

However, direct controls on credit growth, while necessary, are often leaky and not very binding in practice.

#### WORLD FINANCIAL PRUDENTIALITY SYSTEM ####apital flows to emerging-market economies have been on a boom-bust merrygo-round for decades.

pharoah88 ( Date: 16-Nov-2010 11:41) Posted:

New rules for hot money

Tackling capital tsunamis — the most critical policy question for emerging markets today

Nouriel Roubini

cOnflIct-Of-persOnal-Interest [COPI]

Why are domestic prIces, GST, cOsts Of lIvIng, tax rates allowed to be increased but not the bank interest rates and exchange rates ? ? ? ?

CHECK the underlying COPI connection(s) in each issue for each case

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16-Nov-2010 11:45

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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Once UpOn a tIme

wOrld cUrrencIes were balanced by The GOLD STANDARD

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16-Nov-2010 11:41

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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New rules for hot money

Tackling capital tsunamis — the most critical policy question for emerging markets today

Nouriel Roubini

cOnflIct-Of-persOnal-Interest [COPI]

Why are domestic prIces, GST, cOsts Of lIvIng, tax rates allowed to be increased but not the bank interest rates and exchange rates ? ? ? ?

CHECK the underlying COPI connection(s) in each issue for each case

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16-Nov-2010 11:35

User Research/Opinions / ???? G20 ???? and its ???? LEGALITY ????

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G8 are the developed nation MEMBERS.

The REST 12 [R12] are wasting their citizens' hard earned blOOd-and-sweat tax money to be PRESENT when they are nOt qUalIfIed tO be MEMBERS.

When G8 already cOUld nOt cOme tO an agreement Of sOlUtIOn(s), R12's presence wOUld even make the prOcess wOrst becaUse R12 are Only in AssOcIate capacIty.

It is more sensible for R12 delegates to stay hOme and be more productive on own domestic national issues.

Hulumas ( Date: 12-Nov-2010 13:08) Posted:

Sometimes I just wonder . . . . Is it called discussion to find a solution or dictation to fix no solution during G-20 summit ?

pharoah88 ( Date: 07-Nov-2010 13:44) Posted:

Fed’s move likely to complicate US plan at G20

The renewed tension over the Fed’s move is likely to complicate US efforts to get G20 leaders meeting in Seoul next week to press China to sign up to a new accord promising to limit current account balances.

China’s Vice-Foreign Minister Cui Tiankai rejected any attempt by other countries to set target ranges for the yuan to appreciate.

“Of course, we hope to see more balanced current accounts,” Mr Cui said. “But we believe it would not be a good approach to single out this issue and focus all attention on it.

The artificial setting of a numerical target cannot but remind us of the days of planned economies.”

US Treasury Secretary Timothy Geithner last month floated the idea of capping surpluses and deficits on the current account at 4 per cent of GDP.

Asean will also raise its concerns at the Nov 11 to 12 summit.

“We are concerned that the US plan ... might lead to trade protectionism,” Thai Finance Minister Korn Chatikavanij said.

AGENCIES

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16-Nov-2010 11:19

Genting HK USD / Genting HK US$

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16-Nov-2010 11:03

User Research/Opinions / ~TALENT mIs~develOpment=*WEALTH mIs*dIstrIbUtIOn

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As we talk, we mature

Hence the onus on newspapers to present every side of an issue to the public

Letter from Low Hong Quan

I REFER to Senior Minister Goh Chok Tong’s speech at

Mr Goh and Prof Tan both emphasised the need for newspapers to stay relevant and retain sizeable readership in the face of emerging new media platforms.

I agree with their views.

In addition, I believe that the Government should attempt to facilitate the maturing of the collective understanding by encouraging greater press freedom.

By this, I do not mean sensational coverage and irresponsible journalism, that presents citizens with a warped view of reality. Rather, I have in mind the ideal of citizens and journalists offering constructive criticism and responsible feedback on Government policies.

Newspapers and other traditional media provide an important platform to educate readers. In a democracy like ours, public discourse should be based on the premise that citizens view one another as equals and propose reasonable terms of social cooperation.

It is, therefore, imperative that newspapers report impartially without fear or favour so that readers have a “common, accurate set of facts and sound analysis to deliberate and base their decisions on”, as Mr Goh suggests.

A variety of differing opinions and perspectives on divisive issues will allow readers to consider different and often opposing views and come to their own conclusions on controversial issues.Today’s 10th anniversary dinner last Wednesday and Assistant Professor Eugene K B Tan‘s commentary (“A greater role in shaping public discourse”, Nov 10).

Senior Minister Goh reiterated last week that only a thinking population who cares about the future of Singapore can sustain our growth and prosperity.

To help achieve this, the mainstream media must work as responsible and conducive conduits for people to voice what they think — not just concerns and complains but also stark views and untested new ideas.

To remain relevant, this is one area in which newspapers cannot afford to lose ground.

Read Ng Ya Ken’s views and more letters on the topic at todayonline.com/voices

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16-Nov-2010 10:38

Genting Sing / GenSp starts to move up again

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16-Nov-2010 10:31

Genting Sing / GenSp starts to move up again

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Tuesday: 16 11 2010 prIce actIOns