G20 like the non-meetings of The Great Crash 1929

JK Galbraith’s classic book The Great Crash 1929 ought to be on the reading list for G20 leaders and their advisers this week. In the final chapter about the consequences of the crash he details the round of non-meetings that were a feature of the reaction to the crisis in 1930.

Important people met other important people and said important things. Positive press statements followed and more meetings. But nothing really came out of these non-meetings and the die was cast for the Great Depression.

2009 equals 1930?

Is this the same story in 2009? There is clearly going to be a broad disagreement among the G20. The US and Britain have started printing money. France and Germany think this is a big mistake. Japan has previously tried every kind of stimulus and nothing worked anyway.

You have to wonder what sort of a ‘Global New Deal’ could possibly emerge. Gordon Brown looks increasingly isolated and rather foolish: a buffoon who has abandoned prudence for licence and appears rather too fond of the sound of his own voice.

His vanity is perhaps only matched by the towering presence of President Obama whose strident declaration of a strong global economy will surely be his epitaph as the world economy deteriorates further.

Surely from this week’s charade onwards the stock markets of the world will resume their fall. Gold and silver might have some short term weakness but they are still unmatched as a safe haven.

Hot air

Part of the problem is that the run up to the G20 summit has already exhausted the market for hot air and grand declarations. The non-meeting itself can only expose disunity and result in disappointment.

Back to the non-meetings of President Hoover, and let us not forget that in terms of timing he is the occupant of the White House to whom Obama is to be compared, not FDR, he came much later to clear up the mess.
Order my book online from this link