Italy PM Berlusconi says leaders may close world financial markets

Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world's financial markets while they "rewrite the rules of international finance. The idea of suspending the markets for the time it takes to rewrite the rules is being discussed," Berlusconi said today [10 Oct 2008] after a Cabinet meeting in Naples, Italy. A solution to the financial crisis "can't just be for one country, or even just for Europe, but global." G7 finance ministers and central bankers are meeting in Washington today, and will stay in town for the International Monetary Fund and World Bank meetings this weekend. Berlusconi didn't give any details about what kind of rules leaders were looking to change, except to say that leaders are "talking about a new Bretton Woods."

- The fact that a prime minister is even talking about this kind of thing shows how desperate this whole financial system meltdown situation really is. It has moved way beyond sub-prime mortgage loans, beyond the ongoing stock market crash, and it really does look like we are headed for a grand collapse of some kind.

There are roughly 2 ways out : the hyperinflationary scenario, and the hyperdeflationary scenario. Perhaps it might turn out to be something in between, like a new world order, one-worlder-style global currency. The conspiracy theorists are going to get fits. Who knows, the new financial system could be something better (could we even hope for some kind of gold standard?), but at this point it is probably just as likely to be something worse.

It is also very interesting to me that Singapore's Lee Kuan Yew has also come out and made somewhat similar statements to Berlusconi's, as reported on channelnewsasia.com :

Singapore's Minister Mentor Lee Kuan Yew said when the current financial crisis is over, there will be a rethinking of the international financial system. In the next 10 to 30 years, the Indian and Chinese currencies may also have to be figured into the equation. He said: "You will have to factor in over the next 10, 20 years, India will be playing a bigger role. The rupee will become an important world currency as the Indian community grows, so will the Chinese yuan or renminbi. All these will have to be factored into the global financial system. I see that this has to be an inevitable trend - as the economy of the world, the central gravity, shifts from the Atlantic to the Pacific."

Perhaps it may be nothing really new at all, just a continuation of the BRIC trend that some fund managers have seen coming over the past years. It could be this, it could be that, it could be something entirely unexpected altogether. We'll see.

(2008-10-11 20:38:51 SGT) [Biz] Permalink

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