coolhand
Well-known member
Very important talks transpiring this weekend:
This weekend is certainly the single most important period for us to be aware of since the early days after 9/11 and the final days of the Cold War. This is because the global economic structure may be about to change.
The financial minds behind most of the world’s more economically important countries are meeting in Washington this weekend as an official part of the G-7 finance ministers’ meeting. The G-7 — made up of the United States, Canada, Japan, Germany, France, Italy and the United Kingdom — are meeting to discuss the global financial crisis. Later in the weekend they will be joined the rest of the G-20 countries, representing the world’s 20 largest economies. The International Monetary Fund and World Bank also have delegations present, as they will be integral in implementing whatever decisions are made by the G-7 and G-20.
These talks are shaping up to be as critical as those seen in Bretton Woods, the site of the 1943 financial summit that laid the groundwork for the post-World War II global economic structure. The global financial crisis has evolved from being about single countries and “just” economics into something much grander. The global financial crisis is now a political one where these states will define how economic life will operate, and lay the groundwork for what is to come.
With the way the meetings over the next three days are set up, it looks as if the G-7 is coming toward a plan of action today, Oct. 10. It is then up to the G-7 members to get the rest of the world on board — not a small task since most countries are looking out for themselves at the moment.
The meetings will be progressing as follow:
First, the G-7 is meeting as this piece is being written, digesting all that has happened in the past few days and coming up with a rough game plan to operate from. Global credit markets have seized up, and any plan with a hope of success must focus on injecting — perhaps even forcing — liquidity into the system.
Second, the G-7 will direct the International Monetary Fund and World Bank — which operationally, if not technically, report to the G-7 — to communicate this plan to the rest of the G-20 in a swarm of bilateral meetings to be held late Oct. 10 after the G-7 summit concludes, with more of the same scheduled for Oct. 11. The intent of this batch of meetings is to bring the entire G-20 on board with the rough game plan, and hammer out the worst of the inevitable disagreements.
Then, at 6 p.m. Eastern time Oct. 11, all of the G-20 will meet to hammer out the final details of how to address the credit crisis.
There will, however, be one exception to such a “smooth” process. Immediately after today’s G-7 summit the G-7 representatives will be meeting with Russian Finance Minister Alexei Kudrin for dinner. Russia is one of the few countries — the others being Saudi Arabia and China — that sits on a massive amount of cash, but unlike the other two, Moscow has been looking for ways to secure its own political needs and spite the West. This is most likely why Russia is getting its own special session with the G-7 followed up by bilateral meetings with U.S. Treasury Secretary Henry Paulson, U.S. Federal Reserve Board Chairman Ben Bernanke and the delegations from the United Kingdom, Italy and India the morning of Oct. 11. Put simply, Russia represents a wild card that needs to be dealt with independently.
It is not clear how exactly the G-7 will attack the problem, but they have most of those who possess the capability of influencing the global crisis in one city at the moment. This weekend — and especially that 6 p.m. meeting of the G-20 tomorrow — will be a defining moment for the entire world.
History is being made — don’t take your eyes off it.
This weekend is certainly the single most important period for us to be aware of since the early days after 9/11 and the final days of the Cold War. This is because the global economic structure may be about to change.
The financial minds behind most of the world’s more economically important countries are meeting in Washington this weekend as an official part of the G-7 finance ministers’ meeting. The G-7 — made up of the United States, Canada, Japan, Germany, France, Italy and the United Kingdom — are meeting to discuss the global financial crisis. Later in the weekend they will be joined the rest of the G-20 countries, representing the world’s 20 largest economies. The International Monetary Fund and World Bank also have delegations present, as they will be integral in implementing whatever decisions are made by the G-7 and G-20.
These talks are shaping up to be as critical as those seen in Bretton Woods, the site of the 1943 financial summit that laid the groundwork for the post-World War II global economic structure. The global financial crisis has evolved from being about single countries and “just” economics into something much grander. The global financial crisis is now a political one where these states will define how economic life will operate, and lay the groundwork for what is to come.
With the way the meetings over the next three days are set up, it looks as if the G-7 is coming toward a plan of action today, Oct. 10. It is then up to the G-7 members to get the rest of the world on board — not a small task since most countries are looking out for themselves at the moment.
The meetings will be progressing as follow:
First, the G-7 is meeting as this piece is being written, digesting all that has happened in the past few days and coming up with a rough game plan to operate from. Global credit markets have seized up, and any plan with a hope of success must focus on injecting — perhaps even forcing — liquidity into the system.
Second, the G-7 will direct the International Monetary Fund and World Bank — which operationally, if not technically, report to the G-7 — to communicate this plan to the rest of the G-20 in a swarm of bilateral meetings to be held late Oct. 10 after the G-7 summit concludes, with more of the same scheduled for Oct. 11. The intent of this batch of meetings is to bring the entire G-20 on board with the rough game plan, and hammer out the worst of the inevitable disagreements.
Then, at 6 p.m. Eastern time Oct. 11, all of the G-20 will meet to hammer out the final details of how to address the credit crisis.
There will, however, be one exception to such a “smooth” process. Immediately after today’s G-7 summit the G-7 representatives will be meeting with Russian Finance Minister Alexei Kudrin for dinner. Russia is one of the few countries — the others being Saudi Arabia and China — that sits on a massive amount of cash, but unlike the other two, Moscow has been looking for ways to secure its own political needs and spite the West. This is most likely why Russia is getting its own special session with the G-7 followed up by bilateral meetings with U.S. Treasury Secretary Henry Paulson, U.S. Federal Reserve Board Chairman Ben Bernanke and the delegations from the United Kingdom, Italy and India the morning of Oct. 11. Put simply, Russia represents a wild card that needs to be dealt with independently.
It is not clear how exactly the G-7 will attack the problem, but they have most of those who possess the capability of influencing the global crisis in one city at the moment. This weekend — and especially that 6 p.m. meeting of the G-20 tomorrow — will be a defining moment for the entire world.
History is being made — don’t take your eyes off it.
Enjoy the posts.
