The Geared Investor

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I think it is needless to say that to fight this global recession we need to have major cooperation between nations big and small in bringing about market transparencies and bailout plans.  The 2008 Gathering of 20 (G20) meeting in Brazil that took place on November 15th couldn’t have come at a better time.  And for those of you who don’t understand exactly what the G20 even is, here is a defintion directly from the official website:

The members of the G-20 are the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America. The European Union is also a member, represented by the rotating Council presidency and the European Central Bank. To ensure global economic fora and institutions work together, the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis.

The G-20 thus brings together important industrial and emerging-market countries from all regions of the world. Together, member countries represent around 90 per cent of global gross national product, 80 per cent of world trade (including EU intra-trade) as well as two-thirds of the world’s population. The G-20’s economic weight and broad membership gives it a high degree of legitimacy and influence over the management of the global economy and financial system.

When this recession first began and people in the United States were belly aching over the collapse of our banking system, there were rumors that this recession would not be as bad as the great recessions.  Several months and lies later we are starting to see the extent of the problems with seemingly no end in sight.  The moment when I knew that the United States, let alone the rest of the world was in trouble was when we called in leaders from Japan to steer this country away from slipping into the Lost Decade that Japan experienced during the 1990s.  Haven’t heard of the lost decade?   Then you definitely need to read this amazing piece of literature written by John H. Makin.

While it is difficult to get a sense of what was really accomplished at this meeting, I can guarantee that there was a sense of urgency like never before.  The United States had to have our stimulus package and the possible bankrupcy of General Motors on their mind.  Most Americans don’t realize that it is proposed that 10% of businesses are in the US are in some way tied to one of our major auto manufacturers.  Think the jobless claims were bad this month?  Wait until you see what happens if we don’t go full steam ahead with saving this.  Jobless rates way down, US dollar fluctuations, trade ceases, etc.  See why this meeting needs to be productive.  I decided to provide some articles that describe strides that were made at this meeting:

• Credit Crunch: The G20 Summit’s Main Resolutions – and Reactions
• G-20 Urges Stimulus to Ease Impact of Global Slump
• The G-20 Summit: A Vote of Confidence for Capitalism?

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