The Group of Eight Summit Adjourns Without Results: The Inflationary Crisis Continues Without End

The Group of Eight Summit Adjourns Without Results:
The Inflationary Crisis Continues Without End
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
July 11, 2008

Summary: The Group of Eight (G8) Summit has adjourned. Leaders of the member nations warned of inflation-related price rises for both oil and grain. They asked oil producers to increase production. In response to global warming, they offered only empty promises, setting pro forma goals without means of fulfillment. The summit adjourned without results. The most memorable aspect of the summit was the irony of high officials pontificating about food shortages while scarfing down caviar. The Group of Eight Summit adjourned without results. Neither inflation nor the global warming problem received any attention. They continue to make matters worse. This tells us that inflation today's conceals a bigger structural problem, that it is a manifestation of the US dollar crisis. Therefore this crisis will not end any time soon.

Full Text below:

The Group of Eight (G8) Summit has adjourned. Leaders of the member nations warned of inflation-related price rises for both oil and grain. They asked oil producers to increase production. In response to global warming, they offered only empty promises, setting pro forma goals without means of fulfillment. The summit adjourned without results. The most memorable aspect of the summit was the irony of high officials pontificating about food shortages while scarfing down caviar.

The summit did nothing to address the urgent problems of the world.
It made one think of last August, when Germany hosted the summit.
German Chancellor Angela Merkel played host, and French President Nicholas Sarkozy played co-host.
They genuinely hoped the G8 would play an important role in dealing with the turmoil facing the world.

For example, the US subprime mortage crisis was already making financial waves. Sarkozy proposed a thorough investigation of the culprits, the three major U.S. credit rating companies, for suspicion of international fraud. He warned of the hazard posed by the proliferation of hot money, and demanded international standards for dealing with hot money. But his comments threatened the interests of the United States, Britain, and Japan, therefore were totally ignored. An opportunity to deal decisively with the matter was lost. Over the past year, the subprime mortgage crisis has raged on. The US Dollar has been rapidly devalued. Inflation has worsened. Hot money has proliferated. Global economic instability has increased. Only recently has the US Securities and Exchange Commission acknowledged that the culprits in the subprime mortgage crisis are the three major credit rating companies. But little good that does the already deteriorating situation.

At the last summit Chancellor Merkel, aware that the Kyoto Protocol would expire in 2012, hoped that between 2007 and 2012 the United States would assume greater responsibility for greenhouse gas emissions. The United States reportedly still believes emissions reductions will affect its growth rate, and give emerging great powers such as China and India the opportunity to catch up. As a result, it has rejected pressure from Germany and the EU and refused to make any commitments. Instead it has demanded that large emerging nations such as China and India be included in the emissions reduction targets. The United States hopes this delaying tactic will give it a five year reprieve. But it merely led to last year's Bali meeting adjourning without results. This year's G8 Summit continues the trend. Because the United States refuses to take the initiative to reduce emissions, the G8 Summit can only set empty emissions reduction targets without any means of implementation.

For two consecutive years the G8 Summit has adjourned without results. This is regrettable, but not surprising. In recent months, a World Food Summit, an oil-producing and consuming countries summit, and a global climate summit have been held to address problems of inflation and global warming. But many summits have yielded few results. The reason is the larger countries have no intention of using the meetings to solve problems. They merely want to use the meetings to align themselves with allies, oppose dissenters, and look after their own interests. Such meetings could be held 365 times a year. But what would be the point?

Take global inflation. The key lies with the US's long-term balance of payments deficit, caused by an excess supply of dollars, the expansion of US dollar assets, and the loan-to-dollar credit turmoil that follows bankruptcies. The result is an accelerated depreciation of US dollars, and the proliferation of speculative hot money. During the G8 Summit Bush paid empty lip service to "support for a strong dollar." The dollar is depreciating. Speculative hot money is proliferating. Yet the United States continues to increase its international balance of payments deficit and makes no mention of military spending. Evading these problems ensures that they will never be solved. In short, this is essentially an inflationary crisis caused by a "dollar bubble." The situation will only get worse before it gets better. By now the only solution is to allow the situation to sort itself out. Denmark and a number of other European countries are now officially in recession. If the United States' strategy to dominate the world's oil supply remains unchanged, it will invade Iran or used Israel to fight Iran in a proxy war after this year's presidential election. Oil prices will skyrocket, and the world may well face a Great Depression.

The Group of Eight Summit adjourned without results. Neither inflation nor the global warming problem received any attention. They continue to make matters worse. This tells us that inflation today's conceals a bigger structural problem, that it is a manifestation of the US dollar crisis. Therefore this crisis will not end any time soon.

八大峰會無功閉幕 通膨危機方興未艾
【聯合報╱社論】
2008.07.11 03:06 am

八大（Ｇ８）峰會已閉幕，與會諸國領袖對油糧雙漲的通膨問題提出警訊，要求產油國增產，卻對地球暖化問題則只做出徒具目標而無手段的空口承諾。這次峰會的無功而散，使得它在人們的記憶裡，只剩下大啖魚子醬談糧荒一幕諷刺劇。

這次峰會對全球迫切問題完全沒有處理的能力，讓人想到去年八月德國當東道主的峰會。上次峰會由德國總理梅克爾女士作東，法國總統沙克吉為輔，他們面對世界動盪初現，確實想讓八大扮演起重要的角色：

例如，當時美國次貸風暴已現，金融動盪初興，因而沙克吉主張應對次貸元凶美國三大信用評等公司涉嫌國際詐欺問題展開全面性的調查；他同時也預見到熱錢氾濫對每個國家的危害，因而要求規範國際熱錢。但因他的意見嚴重損及美英日三國利益，遂完全未被理會。由於坐失果斷處理的先機，過去一年次貸風暴狂吹，美元急貶，通膨嚴重，熱錢氾濫，使得全球經濟失穩擴大。直到日前美國證管會才承認三大信用評等公司為次貸禍首，但這對惡化的情況又有何益？

再如，上次峰會梅克爾總理有鑑於「京都議定書」的協議時效將於二○一二年截止，遂希望在二○○七至二○一二這最後五年，讓美國在溫室氣體排放上負起責任。詎料美國仍認為主動減排會影響其成長率，而讓新興大國如中印等獲得從後追趕、縮短差距的機會，因而，堅拒德國與歐盟的壓力，不願作出承諾，反而要求將中印等新興大國列入減排對象。這是拖延之計，美國可由此而緩和五年的壓力，但也因此而造成了去年底的峇里島會議無功而散。今年八大基本上也延續這個脈絡，由於美國拒絕主動減排，會議只能做出有減排目標但無執行手段的空口承諾。

八大峰會連續兩年皆無功而散，此誠然令人遺憾，但並不意外。近月以來，全球為了通膨及暖化問題，早已召開過糧食峰會、石油生產國及消費國峰會及全球氣候會議等。但會議雖多，卻於事無補。究其原因，是主要國家並無意藉著會議來解決問題，而只企圖利用會議來黨同伐異，藉以捍衛自己的利益。這種會議縱使一年開個三六五次，又有何意義？

就以全球通膨為例，關鍵當然在於美國長期國際收支赤字造成美元過度供給，美元資產膨脹，以及次貸風暴後美元信用的破產；因而導致美元加速貶值，以及投機熱錢氾濫。而八大峰會上除了布希一句「支持強勢美元」的空話外，對美元貶值、投機熱錢氾濫、美國繼續擴大國際收支赤字和軍費等惱人狀況卻隻字不提。當問題重點被如此閃避掉，問題當然也就失去了面對或解決的機會。也就是說，當今這種本質上是「美元泡沫化」所造成的通膨危機，只得回到順其自然、任其惡化的方向。目前歐洲已有丹麥等多國正式進入衰退階段。設若美國宰制全球的石油戰略不變，在今年大選後入侵伊朗或利用以色列打伊朗，進行代理戰爭，則油價沖天飆漲，致使全球面臨大蕭條也未嘗不可能。

八大峰會無功而散，無論全球通膨及暖化問題，都未獲得緩解，仍走在繼續惡化的方向。這其實已更加提醒我們：當今的通膨問題背後潛藏著更大的結構，亦即是美元危機的具體化，故這股風暴在短期內不會結束。