Diane Francis is a writer/editor/blogger over at the Financial Post (Canada), known for some slightly polemical articles and their sometimes sharply left-wing bent. I’ve seen her attack the Bush administration, Stephen Harper and others – comments left on her blog are always strongly for or against her views.
Her most recent set of posts are catching on to the sinking dollar phenomenon that many of us bloggers, along with Peter Schiff, have already been writing about for a while – but it’s really good, because more people are catching on and the whole idea about the tanking US dollar is becoming a bit of a cliche.
What caught my eye this time were comments she reprinted (I’m assuming they’re verbatim) from George Soros writing in the Financial Times (UK). Basically Soros thinks the upcoming G20 meeting is a serious “make or break” event. This is the essence of his article, and I quote from Diane Francis:
1. Europe and the US in effect guaranteed their financial institutions, which created a capital flight from countries in Eastern Europe, Africa, Latin America and parts of Asia unable to make such guarantees to their banks. This is potentially more ruinous than the current mess.
2. The IMF must protect governments in poor countries or they will have to reneg on US$1.4 trillion in bank loans coming due in 2009 with commercial banks.
3. The U.S. realizes government must fully backstop its financial system, but Germany balks, traumatized by the memory of hyperinflation in the 1920s. The disagreement threatens to disrupt the G20 meeting of April 2.
“It’s the end of an era, as far as the United States is concerned, because the prosperity was built on a false foundation. It has now collapsed, and you cannot rebuild it. So we have to have major changes in the global financial system. And I hope we will be able to reconstruct the financial system on sounder grounds than they were until now,” [Soros] said in a recent interview with a Chinese magazine.
“If you want to have a global financial system, you have to have global regulation, which we don’t have now. All the regulators are national. So you will need to strengthen them, the international financial institutions. That is a big task ahead.”
You can read Diane Francis’ blog post here.
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