Replies to post #354315 on Zeev's Turnips Patch-No Politics (ZEEV)

[was Steve]

i was just an observation of something that amazed me this morning and was included in that post. i wasnt implying it had implications on gold.

[marketmaven]

G7 Looks Like a Fistfight: Rubin, Trichet Warn

Rubin fears deficits could get worse
King on IMF, no yuan mention from top China banker
By Aude Lagorce & Steve Goldstein, MarketWatch
Last Update: 10:04 AM ET Feb. 4, 2005

LONDON (MarketWatch) - Robert Rubin, member of the Citigroup board and former U.S. Treasury Secretary, said Friday he feared that U.S. deficits could get worse and that there's a good chance the dollar could fall more.

Rubin was speaking at a London conference ahead of the Group of Seven gathering of finance ministers and central bankers this weekend. Federal Reserve Chairman Alan Greenspan and Bank of England Governor Mervyn King as well as Zhou Xiaochuan, governor of the People's Bank of China spoke ahead of the G-7 meeting.

Rubin said President Bush's Social Security reform plan could increase deficits. He also said Japan hasn't done enough to boost its economy and Europe needs to be "more energetic" on reform.

Greenspan said market pressures "appear poised to stabilize and over the longer run possibly to decrease the U.S. current-account deficit and its attendant financing requirements." Read full text of Greenspan's remarks.

The dollar gained against the euro on Greenspan's remarks. See story

King questions de facto dollar

The Bank of England's King told the conference goers that he questions the dollar's role as a de facto reserve currency for Asian countries.

"When the country in question is also the issuer of the reserve currency, the rapid build-up in the assets denominated in the reserve currency contributes to the potential instability of the international monetary system," he said.

He added the role of the International Monetary Fund needs to be rethinked. "I encourage the Fund to articulate a positive vision for the management of the international monetary system in its forthcoming strategic review. I am not convinced that the future of the Fund is primarily as an occasional international lender of last resort for middle-income countries suffering financial crises," he said.

Separately, European Central Bank President Jean-Claude Trichet said long-term current account deficits by industralized countries are not acceptable. He reiterated calls for European countries to reform.

Zhou: No currency mention pre G-7

Zhou Xiaochuan, governor of the People's Bank of China, didn't mention China's currency during a speech in London at the Advancing Enterprise 2005 conference.

Zhou said in the speech that China needed to boost consumer confidence, including reforming its social security program. People are saving too much -- "contrary to the United States," he said.

Currency markets are closely following the G-7 officials for any remarks. The meeting of finance ministers and central bankers officially begins later Friday and continues on Saturday.

U.S. affirms: Wants more flexible China currency

Earlier in the day, the dollar weakened against the yen after John Taylor, U.S. Treasury under secretary, reiterated that the U.S. wants China to prepare for a more flexible currency regime.

The dollar weakened to 103.90 yen from 104.20 yen after the comments, which were reported by Dow Jones and Reuters news agencies.

Separately, the British pound saw some strength, trading at $1.8845, after Taylor made clear the U.S. wasn't in line with the British proposal on debt relief plans for developing nations.

ECB Trichet says long-term deficits unacceptable

By Steve Goldstein
LONDON (MarketWatch) -- European Central Bank President Jean-Claude Trichet in a speech in London said long-term current account deficits by industralized countries are not acceptable. He reiterated calls for European countries to reform.