The following story is so important that I am asking you dear readers to try and absorb its implications to the US. The world is now questioning the dollar as the reserve currency for trade and the structure of our financial house. We can’t blame them for questioning why the US government and Wall Street LIED so heavily to them about the safety of the US economy. This affects all US citizens since our government has put all of us at extreme financial risk.

The two-day summit was the first meeting of Asian and EU chiefs since calls for coordinated action mounted along with bank failures and plunging stock prices that began last month. The U.S. will host the Group of 20 industrialized and developing nations on Nov. 15 at the urging of Sarkozy.
South Korea said it ``highly valued'' Sarkozy's ``strong leadership.''

The French president has compared the effort to the 1944 Bretton Woods conference in New Hampshire that fixed exchange rates, hitched the world to the gold standard and created the International Monetary Fund and World Bank.
The EU has floated the ideas of including more bank supervision, stricter regulation of hedge funds, new rules for credit-rating companies and changes at the IMF.

`Falling Behind'

``The IMF, World Bank and other agencies are falling behind the times,'' said Jeon Hyochan, a researcher at Samsung Economic Research Institute in Seoul. ``The agencies need to strengthen their ability to take pre-emptive measures.''
The Washington-based IMF is considering an emergency program to prevent a collapse of emerging markets by almost doubling borrowing limits for members and waiving its standard demands for economic austerity measures. The agency agreed yesterday to lend Iceland $2.1 billion in accordance with existing rules after the island nation's banking system collapsed, threatening a prolonged economic contraction.

``There is a unanimous consensus to push forward reform,'' said Kazuo Kodama, a spokesman at Japan's Ministry of Foreign Affairs. No agreement has been reached on the details of that reform, he said.
`Excessively Stringent'
Japan wants the IMF to be able to act in a ``nimble, speedy, timely manner'' and ``without excessively stringent conditions'' when helping poorer nations, said Osamu Sakashita, a spokesman for Prime Minister Taro Aso.
The EU and Asian leaders were less specific in their statement, which says the ``IMF should play a critical role in assisting countries seriously affected by the crisis.''

Sarkozy's campaign for an overhaul threatens to expose differences with the U.S. over global financial governance. That may provoke tensions and bog down talks while individual countries continue to act on their own to limit the fallout.
Sarkozy said the mid-November meeting in Washington will involve regulatory decisions because EU and Asian leaders agree that action is needed. He and Wen said China will be an ``active'' participant.

``We have all understood it would not be possible to simply meet and have a conversation,'' Sarkozy said. ``We needed to turn it into a decision-making forum.''

Exchange Rates

The gathering to be hosted by President George W. Bush will be the first of a series of financial summits that will also address foreign-exchange rates, according to Sarkozy, who said talks about currencies may be put off until after Nov. 15. ``It is simply impossible to talk about the financial crisis without discussing currencies and the way in which they interact.''
The pound and the euro have both lost more than 20 percent against the dollar in the past three months, and more than 30 percent against the yen. Aso said derivatives products that ``flow around the world'' should also feature on the agenda.
South Korea stressed the importance of trans-Atlantic unity in taking any actions. ``If Europe and the U.S. become united, it would enhance whatever countermeasures are taken,'' South Korean President Lee Myung Bak said, according to his spokesman, Lee Dong Kwan.

The credit crisis is choking off funds to companies and people, undermining business and consumer sentiment. Economists at Deutsche Bank AG expect the Group of Seven economies to contract 1.1 percent next year, the worst since the Great Depression, and global growth to be the weakest since the 1980s.

Markets Tumble

Stock markets and commodities have tumbled along with currencies this year amid growing concern that governments, central banks and finance ministers are powerless to counter eroding corporate earnings and a global recession.

Oil-producing nations haven't escaped the carnage as crude plunged 56 percent from its July peak to $64 a barrel.
More than $10 trillion has been erased from the market value of equities so far this month, accounting for about one-third of the total value wiped off stocks this year. MSCI's index of developed and emerging stock markets plunged 48 percent in 2008 and is heading for its worst year on record as credit-related losses topped $660 billion.
The Standard & Poor's 500 index is down more than 40 percent this year, poised for its worst annual retreat since 1931. The S&P 500 has lost 26 percent since U.S. investment bank Lehman Brothers Holdings Inc. declared bankruptcy on Sept. 15, while the U.K.'s FTSE 100 has fallen 25 percent, Japan's Nikkei 225 has tumbled 37 percent and Germany's DAX has dropped 29 percent.

this story comes from Jennifer M. Freedman in Beijing at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; Jonathan Stearns in Beijing at This e-mail address is being protected from spambots. You need JavaScript enabled to view it