During the last weeks most think tanks, governmental agencies and  departments, international organizations, universities, etc. are  working hard (or should have been) to prepare the summit on November  15th.

Which are the current positions? Basically three, or two dot five.

The first one, although it has no posibility at this point, is the  right wing wish, to do nothing too significant except to take funds  from developing countries to fund recovery in developed ones in the  hope that, somehow, it will produce development in developing countries  later. Again the top-down approach.

The third one, although it has no posibility to win today, is to  approve the road map to fix the real problems. It means not just a  change in the financial order and its institutions, such as the IMF, but also to change the monetary practices and in particular the  international currency. I must understand that public opinions in the  West, and in particular in USA, are not ready for such announcements,  especially when a new administration will come within some weeks.  Politics is above economics, I accept it. Then, we will have to see  more emergency summits along the next two years.

In the middle, the second one. As I wrote some weeks ago, that summit  will approve three strategies:

1. To set up a new financial toolkit that becomes mandatory for  financial institutions of any sort since rating agencies to  commercial banks. Enhancing and fixing current agreements such as

Basel 2 and the Financial Stability Forum (FSF). Obviously,  international monitoring institutions have to be created or  empowered.

As the The Peterson Institute for International Economics states (1)  "The objective should be to turn the IMF into a body where national  authorities agree on the outlines of what each of them will  legislate. In particular, one envisages that an international  agreement made in the IMF will lay down minimum standards that all  countries will ensure. The actual tasks of regulation and supervision  will remain national responsibilities."

Now, the developed nations have to leave Wonderland and face the real  world. No country will fund them any longer unless those who really  own the economic means control that their funds are used properly.

As as example, it means that US economic policy will not longer be  allowed to use "shopping and tax cuts the official macroeconomic  policy of the United States." (2) as Jeffrey Sachs writes in an  article that I strongly recommend to my American friends.

Although as prof. Kenneth Rogoff wrote today (3) "Without its own  currency, the IMF is poorly positioned to intervene with the  overwhelming force needed for lender-of-last-resort operations. In

principle, the IMF could be allowed to print money (it already has  its own accounting unit, the so-called Special Drawing Rights). But  this is not realistic, given the lack of an adequate system for  global governance.".

Probably he has not received information on the proposal to  subordinate the Fed to a part of the IMF and the US dollar the  currency of the IMF. In any case,. this step will not be approved on  November. Therefore, we will have to let  the rules approved in  November fail and public opinion in the West will be ready for next  steps.

2. To create an international structure that reflects the real  situation of the economic and financial order. The West, in  particular USA, has a huge capacity to create global problems, but is  Asia which has a huge capacity to fix them. To balance the power in  the IMF and other international institutions will be a second  achievement. The West cannot count on blank checks any longer to fix  their problems. In particular while it still shows doubts on  sovereign wealth funds that is exactly where the solution will come from.

3. And finally, the obvious one. The summit itself. This gathering  shows and prepares the internation public opinion for the truth. This  is no longer a "Western world plus Japan". It is a multipolar world,  despite what people like or dislike.

Peace and best wishes.

Xi

(1)  http://www.petersoninstitute.org/realtime/?p=153

(2) http://www.thebigmoney.com/articles/judgments/2008/11/05/what-

obama-needs-do

(3) http://search.japantimes.co.jp/cgi-bin/eo20081106a2.html

(I have posted this text in my English blog-group too).