As expected by myself and others, the G20 summit meeting in Korea has done nothing to solve the issues regarding currency and trade. In fact, it is beginning to look as though the situation is getting worse.
The main goal of the summit for the US was to have a movement to pressure China into revaluating its currency. This did not happen, in my view because of the “quantitative easing” that the US Federal Reserve has done. The US purposely devalued their dollar in order to boost export trying to get an advantage over its rivals.
$600 billion dollars were printed to purchase $600 billion in US Treasury securities. This move has caused exchange rates to increase dramatically harming major exporters (Germany and Japan) as well as the Tri-continental economies. There has been a massive increase of speculative money and creating asset bubbles in these countries, something those countries do not want.
As an economic security caution many countries have put serious restrictions on foreign capital coming in. Similar to how physical US currency is banned in Venezuela to prevent covert attempts by the US to cause inflation.
One issue causing trouble is a demand by the US that there be a limit of 4% gross domestic product account imbalances. This means a country forced to not have a trade surplus or deficit of more than 4%. No one is fooled by this; it is a blatant attempt by the US to cut into the trade of China, Germany and Japan, forcefully. Of course they are opposed to this measure.
Another problem or the US was its inability to work out a new trade deal with South Korea. The US was seeking concessions in automobiles and beef.
With all this US pressure against China, China has finally decided to start openly defending itself.
The leading nations are starting to turn on the US as well now. Germany and Japan are being hurt by the US’ new monetary policy and currency bullying against China. Both countries have traditionally been long time US allies, but now they are starting to back away from their friendship. The US is losing support for their currency war on China, which means physical war my happen soon.