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October 12, 2008

Meanwhile, back at the economic crisis...

Rick Moran
You may not have heard but one of the most important meetings in a long time is happening in Washington this week.

The finance ministers of the world's richest countries are meeting to try and craft a strategy that will avoid what the IMF is warning about; a "global financial meltdown,"

The Wall Street Journal:

Mr. Bush, who had started the day shortly after daybreak with a Rose Garden appearance with finance ministers from the world's richest countries, made an unexpected late day visit to the headquarters of the 185-nation International Monetary Fund. With Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, he participated in an evening discussion with the Group of 20 which includes rich countries and major developing nations such as China, Brazil and India.

Brazilian Finance Minister Guido Mantega said that the president had stressed the seriousness of the current situation and told the finance ministers that he was doing all he could to involve other countries in efforts to resolve the crisis.

In response, the G-20 countries issued a joint statement in which the finance officials pledged to work together "to overcome the financial turmoil and to deepen cooperation to improve the regulation, supervision and the overall functioning of the world's financial markets."

Earlier Saturday, after emerging from a meeting with finance ministers from the group of seven leading industrial nations, Mr. Bush said that turmoil in financial markets requires a "serious global response," but cautioned that the world wide economic crisis won't be solved "overnight."

"We're in this together, we will come through it together," Mr. Bush said in remarks from the Rose Garden. "We will stand together in addressing this threat to our prosperity, we will do what it takes to resolve this crisis, and the world's economy will emerge stronger as a result."

These are all good signs and by all rights, these kinds of words and actions should calm the markets and free up the credit markets.

But logic has no place in a panic and it is unclear whether the finance ministers are spitting in the wind or whether they can actually craft a series of actions that will make a difference and avoid the worst case scenario that the IMF is warning about.

All we can do is wait and see.

Posted at 12:39 PM | Email | |

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