The G7 (or G8. It’s been going back and forth between those two for a while now. In keeping with this indecision, I will interchange these throughout this post) have been meeting in Rome over this weekend. They have said that the World Economy is in a pretty bad state. They think it’s going to remain that way for the rest of the year, at least. A dire assessment of things, if you ask me. However, this in not unique. Everyone else has been saying the same thing. It’s nice to see that we are all on the same page, right?
Well, the G8 claim that they are going to do everything in their power to fight this global recession, or depression, as it is fast becoming. I think this underscores what is different about this particular downturn. It’s the unprecedented level of influence the Governments of the world are unleashing to combat it. It’s also the fact that they are willing to work together on a global scale. This is what gives me hope. It’s why I think we might get out this in better shape than we got in.
It’s in times of adversity that people come together the most. Differences are put aside, old squabbles temporarily suspended as we unite to fight the common enemy (To experience this phenomenom first hand, try saying something disrespectful about the US Army at Baseball game). In this case the enemy is one that threatens to wreak havoc on all of us. It’s nice to see we are all on the same side.
In keeping with this, the G7 have stopped attacking China on it’s “controversial” Currency Policy. The US was initially speaking out against China, trying to get it to revalue it’s currency, which currently is undervalued, as far as most others are concerned. This means that China’s Export industry, for instance, is holding up better than others. In this environment, where the US (and Japan) are hurting, one can see why the US was moaning. That’s out of the window, for now.
The G8 said little about influencing Currency rates though. I guess some people expected that. The conspicuous absence of a statement on this means that any co-ordinated response, currency-wise, will be minimal. All-in-all, like everybody else, they are still trying to figure out how to beat this. There’s a silent hope that it will simply pass way, like a particularly bad storm, or nightmare even.
As always, I am hopeful that it will pass…sooner rather than later.