On November 15th US President George Bush will host a gathering of world leaders to address the current global financial crisis. There has been resentment in some quarters with many blaming the US for the financial meltdown. The crisis started in the US with the sub prime mortgage crisis and quickly spread to the whole US economy and ultimately resulted in a $700 billion dollar bailout of financial institutions. Credit markets froze and interbank lending ceased and businesses found themselves unable to obtain loans for day to day operations. Governments in both Europe and the United States have thrown billions of dollars at the crisis hoping to avoid a worldwide recession, calm volatile stock markets, and thaw frozen credit markets. Under pressure from European allies President Bush agreed to host the first in a series of meetings to address the economic crisis. The leaders will discuss progress made addressing the crisis, analyze its causes, and develop policies and reforms to prevent similar events in the future. Those invited are leaders of the G20, which includes the Group of Seven major industrialized nations and key emerging economies like China, Brazil, Saudi Arabia and India. Also invited are leaders from the International Monetary Fund, The World Bank, and Financial Stability Forum. White House spokeswoman Dana Perino said, "Everybody will come with their ideas and the president recognizes that every country is going to have a responsibility but not every country is going to have the same solution." Bush will host a dinner the evening before the conference but at present no venue has been announced. The summit will take place 11 days after the US presidential election and the White House has indicated that they will seek input from the winner of the election. In a statement Obama said, "America must lead and other nations must be part of the solution too." McCain also expressed support for the conference stating that the conference is, "an important opportunity to take urgent steps to recovery and prevention of similar crises in the future." The announcement for the gathering happened four days after Bush conferred with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso. Sarkozy stated the meeting would be "followed by several others aimed at rebuilding the international financial system and making sure the current crisis does not happen again thanks to better regulation and more efficient surveillance of all players." Sarkozy has been asking for a summit for weeks and has suggested an overhaul of the international financial architecture established at the 1944 Bretton Woods conference. The Bush administration has been somewhat resistant to an overhaul of the world system. Instead the Bush administration proposes freer markets, boosting trade and increasing flows of capital across borders. In a statement emphasizing his support of free markets Bush stated, "Anything that we do through this series of summits, I think we want to ensure that we don't inhibit that kind of market activity, that we continue to see investment and that we continue to see increased trade." What happens at the conference could very well be determined by whoever wins the 2008 presidential election. In January there will be a new administration in Washington and as with every change of administration comes changes in policies. An Obama administration would probably be more open to increased regulation while a McCain administration would most likely support unfettered free markets. The series of summit meetings are sure to produce reforms and more cooperation between nations affected by the crisis. In the meantime the US dollar is strong on Forex markets trading high against the Euro and other major currencies. Changes in world monetary policies could easily make Forex markets as volatile as stock markets but will still offer investors opportunities that other markets cannot match.
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