China says G20 should monitor US Fed

China’s state media has issued a new broadside at the US Federal Reserve’s move to prime the US economy, suggesting the Group of 20 should monitor policy shifts by the US central bank.

The Xinhua news agency said in a commentary the Fed was “risking the global recovery by following its own track for economic revival” by spending an extra $US600 billion ($A593.65 billion) buying Treasury bonds to stimulate the US economy.

The comments were published just days ahead of two key summits this week – the G20 meeting in Seoul and the Asia-Pacific Economic Co-operation forum in Yokohama, Japan – that are expected to focus on rebalancing global trade.

“There is an urgent need for the G20 … to set up a new mechanism that effectively monitors the issuer of the international reserve currency, especially when it is not able to carry out responsible currency policies,” Xinhua said.

“It is necessary for the issuer of the international reserve currency to report to and communicate with the G20 group before it makes major policy shifts.”

The commentary was the latest in a barrage of criticism from Chinese officials and state-run media of US policies, especially the Fed’s so-called “quantitative easing”.

China and other emerging economies worry that much of the new US money will flood their financial markets, with players seeking higher non-dollar returns.

The Xinhua commentary also called for deeper reforms in global financial institutions such as the International Monetary Fund, and greater representation for developing countries – a position long held by Beijing.

http://www.tradingroom.com.au/apps/view_breaking_news_article.ac?page=/data/news_research/published/2010/11/313/catf_101109_201300_9600.html

I wear many hats but history, economics and political observance have always been a passion. I am a graduate of the University of Cincinnati College of Business with a degree in Information Systems and Digital Business with a minor in European History. I work for a small mom-and-pop IT consulting and software design company. We deal in servicing mostly government funded non-profit mental and behavioral health care agencies in the state of Ohio. In this I deal with Medicaid and Medicare funds and have a little insight on the boondoggles of government there. Thankfully the undemanding nature of my daily profession gives me ample time to read and stay aware of our current state of affairs which I find stranger than fiction in many instances. In addition to being in the IT field, I have also been self employed with a small contracting company so I might know a thing or two about the plight of small business that employs 71% of the American workforce. I however don't draw my knowledge from my day jobs, which I have had a few; I draw it from an intense obsession with facts and observation about the world in which I live. I do have formal education in things such as history, economics and finance particularly as it pertains to global issues, but I have come to find much of what I thought I knew from the formalities of a state university I had to unlearn through much time and independent research. I hope you enjoy what I bring you which is not often heard in the mainstream news outlets. I would like to think my own personal editorializing is not only edifying but thought provoking while not at all obnoxious. That last one may be a hard to achieve.

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