G20 Breakdown

Those whose job it is to create a safe world for bankers are sure hoping to not be bothered by outsiders, as seen in the G-20 security plans that have been announced

According to Const. Ed Boltuc, a Toronto police officer and community liaison with the Integrated Security Unit:

“The Olympics that you saw recently in Vancouver was actually the largest security event ever to take place here in Canada. The G20/G8 surpasses that completely. There’s going to be a massive — absolutely massive — presence of police and security on the ground like you’ve never seen before.”

Why am I getting the sneaking suspicion that Harper, in all his ideological zealotry and his distain for democratic processes, is looking to show the world that he can kick ass with the best of them and that nothing is going to stop him from doing what he wants, where he wants? Why else would he be having the G-20 right downtown in Canada’s largest city?

The Star further outlines the plans:

This inner security zone will be strictly controlled during the summit weekend and blocked off with an “unscalable” fence rising at least 3 metres, Boltuc said. Anyone requiring access will have to pass a “five-tier system of security,”

The outer layer will be protected by Toronto police, Boltuc said. While speculation had placed the boundaries at Queen St. to the north, Yonge St. to the east, Lake Shore Blvd. W. to the south and Spadina Ave. to the west, Boltuc said the area won’t be quite that large.

The U.S. and China are in a big battle right now over exchange rates – with serious global repercussions. Some are calling for this issue to be resolved through the G-20.

China relies heavily on selling cheap exports to the U.S., while the U.S. relies as much on China buying it’s treasury bonds in order to service the U.S. debt. This relationship has created a kind of an equilibrium where neither side wants to tread too strongly on the other.

However, the U.S. is accusing China of falsely depreciating it’s currency (the renminbi) so that China can increase its exports to the U.S. (and other countries) based on the low cost of buying their products. The U.S. is losing export opportunities due to it high exchange rate relative to the renminbi.

And there are calls for action against China, despite fears of retaliation. Even the U.S. Chamber of Commerce, which has done everything over the years to back China’s entrance into the world economy (at the behest of multinational corporations), is calling for the U.S. to name China as a ‘currency manipulator’ and possibly place tariffs on China.

It is also interesting to see the U.S. crying foul about a market (theirs) being artificially flooded by cheap goods (China’s). The U.S. agricultural industry has been doing this for years with cheap subsidies of corn and other products to Latin America, especially Mexico. This has wiped out much of Mexico’s domestic corn industry, knocked farmers off their land, and been a key factor in Mexican economic migration to the U.S. The U.S. has traditionally been fine with artificial markets, as long as they are not hurt themselves.

This all points to a key problem facing global capitalism in the wake of the financial crisis – lack of demand and overproduction. In the wake of low depressed wages worldwide and high unemployment, there is a scramble to get at whatever consumer demand they can round up. Thus the focus on countries like China that still have global demand for their products, and the concern that they are doing it artificially. The countries with strong trade surpluses like China are seen to be “taking more than their fair share of world demand and are under pressure to boost their domestic markets”.

Many are seeing this as a key issue for the G-20 to take up, especially as it moves to become the prime location for creating global policies for economic growth and financial reform.

It will be very interesting to watch in the weeks leading up to the G-20 meetings, as the game of cat and mouse continues between the U.S. and China.