With Obama Humiliated, Leaked G-20 Draft Reveals More Fiscal, Monetary Stimulus Coming

With the September G-20 meeting set to begin any moment in Hangzhou, China, a periodic, toothless event which is noting more than an opportunity for world leaders to take photos such as this one (they picked the happiest photo of the batch)...

... the draft communique has already been leaked, in other words the determination of the summit has been made before it even took place.

Of course, the big news of this weekend's G-20 event was neither the summit, nor the communique, but the unprecedented and prearranged snub by China targeting president Obama, who after an unexpected show of solidarity on Saturday over the global effort to address climate change, was humiliated by China when Obama arrived at Hangzhou Xiaoshan airport, when as reported earlier, first the receiving China delegation made sure there was no staircase for Obama to exit the plane and descend on the red carpet; the president of the world's most powerful nation was thus forced to use an emergency exit for his final arrival in China as commander in chief.

Then, around the time Obama was exiting through the emergency staircase, a Chinese official attempted to block national security adviser Susan Rice and Deputy National Security Adviser Ben Rhodes after they lifted a blue rope holding back press and walked to the other side of it, closer to Obama. A member of the Chinese delegation began shouting at White House staff, demanding the pool leave the arrival scene. A White House official said Obama was our president and Air Force One was our plane and that the press was not going to move from the designated area. The Chinese official angrily responded "This is our country. This is our airport."

The scandals continued later, with members of the Chinese and US delegations coming close to throwing punches at each other: as we previously reported, two Chinese officials - one working to assist the American delegation - had to be physically separated after trying to hit each other outside an event.

As the WSJ adds, "the Chinese barred Mr. Obama from including his traveling press contingent in his motorcade. The hosts also have refused a White House request for a joint press conference with Mr. Xi, and they plan to block Mr. Obama’s solo press briefing from airing live on Chinese television."

In short, the fate of G-20 meeting was fixed: no matter what was decided, it would forever be remember as the event where China snubbed the US president in an unprecedented fashion one final time.

Incidentally, for those wondering why the meeting took place in Hangzho, a city which Chinese authorities literally had to empty out, instead of Beijing, the answer comes from the Twitter account of Beijing Air:

 

Which is ironic, because as the WSJ also reported earlier, "President Obama and his Chinese counterpart Xi Jinping stood with U.N. Secretary General Ban Ki-moon to announce the U.S. and China’s formal adoption of the international climate change agreement reached in Paris in December 2015. They also detailed a road map to achieving emissions reductions in commercial aircraft and for phasing out hydrofluorocarbons."  Which is completely meaningless, as none of the provisions of the Paris Treaty are enforceable, and Beijing has zero intentions of actually following through with the toothless treaty.

In any case, thanks to Bloomberg, according to the leaked draft G-20 communique, global leaders "should make full use of a range of policy options, including fiscal as well as monetary measures, to revive economic growth that still falls short of desired levels."

In other words, even more global debt, even more liquidity injections by central banks, even higher asset prices, even more social discontent, nationalistic passions and populism.

Among the other G-20 (pre)decisions in the communique draft seen by Bloomberg:

  • Financial market volatility poses downside risks to growth: draft communique
  • Fiscal strategies equally important as monetary ones: draft communique
  • Excess volatility, disorderly moves in foreign exchange markets hurt stability: draft
  • G-20 recognizes excess steel capacity as global issue: draft
  • Subsidies can contribute to global excess capacity: draft
  • UK vote to leave EU adds to global economic uncertainty: draft
  • Terrorism a serious challenge to international security: draft

And so on, and so forth, as yet another meeting of the world's "best and brightest" leaders leads to absolutely no new ideas how to fix a problem that was caused by debt than just creating even more debt, meaning that the red line shown below is about to truly take off.

 

We know how it all ends; the only thing we are curious about is if the Chinese will force an already humiliated Obama to fly commercial in his final return to the US... coach class.