Thursday, January 29, 2009
What happens in Davos stays in Davos. Thank goodness.
Every year during the waning days of January and the early days of February, 2,500 business, political, religious, and community leaders gather in Davos, Switzerland, and try to solve the world's problems. The event is the World Economic Forum (WEF). It's filled with conferences, breakout sessions, and plenty of opportunities for powerful people to put forth their ideas.
And in previous years, they got to hang out with the likes of Brad Pitt, Angelina Jolie, Bono, and a host of other celebrity do-gooders. But Brad and Angie didn't make it this year. Bono is missing as well. And according to press reports, the mood in Davos is downright depressing this year.
A global recession will do that.
Nonetheless, there's work to be done. According to Vladimir Putin, Russia's prime minister and a keynote speaker at Davos yesterday, part of that work is getting rid of the U.S. dollar as the world's reserve currency.
Wen Jiabao, China's premier and another keynote speaker, complained the reasons behind the current economic downturn were "inappropriate macroeconomic policies in some economies, characterized by a low savings rate and high consumption."
The leaders of both Russia and China were basically pointing west and saying, "It's their fault." They argued it was time for a change. And the change they were thinking of would be bad for the United States.
So it's probably a good thing not much ever really comes out of Davos. Oh, sure, lots of important people get together and talk about lots of important things. But in the 28-year history of the WEF, you'd be hard-pressed to find any concrete accomplishments.
The WEF promotional material crows about how in 1994 Shimon Peres and Yasser Arafat talked for hours during a private meeting in Davos and managed to restart the Israeli-Palestinian peace process. That's the Davos claim to fame... and we can see how well that all worked out.
This year, it looks like there will be a lot of U.S. bashing and a lot of talk about reducing America's economic influence. Right now, it's just talk. And if history is any sort of a guide, it will remain just talk.
The really ironic thing about Davos this year, though, is many of the people who are coming together and trying to solve the world's financial problems are those who helped cause them in the first place.
Best regards and good trading,
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