Obama says U.S. low growth or no growth danger to world

U.S. President Barack Obama defended the Federal Reserve’s policy of printing dollars on Monday after China and Russia stepped up criticism ahead of this week’s Group of 20 meeting.

The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent a currency row escalating into a rush to protectionism that could imperil the global recovery. [ID:nSGE6A703T]

But there is little sign of consensus.

The summit has been overshadowed by disagreements over the U.S. Federal Reserve’s quantitative easing (QE) policy under which it will print money to buy $600 billion of government bonds, a move that could depress the dollar and cause a potentially destabilising flow of money into emerging economies.

So, where will be be when China decides to bail out on buying our debt, since it’s value will be diving due to the Fed’s inflationary debt monetization? We don’t really want to go there…but we might not be given a choice in the matter.

As a historical sidebar note, something somewhat similar happened to us before…where a reform-minded US president with economic difficulties told the world to shove it, that we were doing our own thing in spite of it’s impact on them.

The occasion was during the early days of the FDR administration in 1933. Roosevelt set the stage in his first inaugural address by stating that “our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy.” He went on in June 1933, to instruct the Secretary of State who was attending the London World Economic Conference that “…far too much importance is attached to exchange stability…”

AS the Conference continued, he sent what has become known as the “bombshell message” July 3, 1933 in which he told the Conference delegates that the U.S. would NOT be a party to efforts at exchange-rate stabilization while declaring that “old fetishes of so-called international bankers are being replaced by efforts to plan national currencies”.

THe ultimate take-away message to the world was that the U.S. was going to be focusing on its own situation, and was not willing to extend itself to take part in concerted international efforts to avert danger. The lesson was not missed by Hitler, who saw a green light to his own nationalistic plans for “problem solving”.

(ref: Freedom from Fear; David M. Kennedy; Oxford Univ. Press, 1999)

So we REALLY want to give a similar impression to such luminaries of international peace and enlightenment as the Chicoms, and Putin’s Russia? REALLY?