Amidst a flurry of violent protests, the G20 leaders hammered out a $1 trillion deal to combat the global financial slowdown.The arrangement would pledge $750 billion in order to strengthen the International Monetary Fund (IMF) including creating a Financial Stability Board designed to serve as “an early warning mechanism for the financial system.” The funds destined for the IMF also contains $250 billion for the purpose of lending among the IMF’s 185 members.
In addition, $250 billion will be spent in financing for global trade including $100 billion in aid to impoverished countries. The conference’s final statement pledged to "name and shame" countries that have established protectionist measures.
The deal is sure to ruffle the feathers of some Latin American countries that have recently raised tariffs and have added red tape to incoming foreign investment. The deal is likely to help one of the G20 countries- Mexico- who yesterday sought a $47 billion credit line from the IMF. Another G20 member- Brazil- will be obligated to contribute funds to the IMF for the first time in the country's history.
We finish this post with President Obama’s possible man-crush towards his Brazilian counterpart:
"That's my man right here," President Obama said this morning at the G-20 summit as Brazil President Luiz Inacio Lula de Silva approached him. "Love this guy. He's the most popular politician on earth. It's because of his good looks."Image- MSNBC
Online Sources- Guardian UK, washingtonpost.com, Xinhua, The Latin Americanist, WSJ.com, BBC News, forbes.com, New York Times
I wonder how the world will deal with the result of this $1 trillion deal. The amount of inflation will be incredible. But lets hope it'll start up the economies so they can produce more and hide the inflation in there somewhere.
ReplyDeleteTake care, Elli