Some G-20 Minister's Wise to Geithner's Snake Oil Pitch

Group of 20 finance chiefs conclude talks today with the U.S. running into resistance as it pushes targets for current account imbalances as a new way of prodding China and other Asian nations to let their currencies rise. G-20 finance ministers and central bankers are meeting in Gyeongju, South Korea, after weeks of accusations that countries from the U.S. to China risk sparking a trade war by relying on weaker exchange rates to spur economic growth.

Tim Geithner

Seeking a solution, U.S. Treasury Secretary Timothy F. Geithner proposed in a letter that G-20 members pursue policies to reduce trade surpluses and deficits “below a specified share” of their economies. That suggestion yesterday split the forum of emerging and industrial economies. “Setting numerical targets would be unrealistic,” said Japanese Finance Minister Yoshihiko Noda, while German Economy Minister Rainer Bruederle rejected a “command economy” approach. Indian Finance Minister Pranab Mukherjee said caps would be hard to quantify. In interviews with Bloomberg Television, Canadian Finance Minister Jim Flaherty said the idea was a “step in the right direction” and Australian Treasurer Wayne Swan called it “constructive.” Read more here:

Some G-20 Minister's Wise to Geithner's Snake Oil Pitch