Now we know it will eventually end! G20 summit sent a clear message to the World

Hello to everyone. Yesterday my day could be described as “madness”, with meetings starting from 09.00, until late in the night, almost every one or two hours. So I got back home pretty late, trying to read the news that my friends have been talking about: “G20 summit saved the World”, “Finally, we finished with the problem” and other phrases like this made me a bit curious, to search and discover more. The news, more or less, is that:

1,1 trillion dollars to… save the World!

• • The funds of International Monetary Funs, destined to save economies with problems, will be tripled, from 250 billion dollars to 750 billion, a raise which will occur in 2 phases.
  • There will be established new rules in bonuses for the financial sector. Gordon Brown said “From now on the ones who failed will not be rewarded” (at least this is the meaning of his words)
  • There will be established a new regulation and monitoring system for the high risk investment funds.
  • Tax havens all around the world will be forced to collaborate with the fiscal authorities of other countries, if not they will enter in a black list and face serious consequences.
  • Bank accounts will become transparent and open all around the world.
  • Emerging countries will have more rights and power to participate in key decisions for the future of the World economy.
  • There will be new rules regarding companies like Moody’s, Goldman Sachs etc, as we all got tired of reading good or bad reports, based on other interests that a company may have.
  • The whole World economy will be regulated much better, companies will be forced to work with more transparency and adopt better accounting methods.
  • 250 billion dollars will be allocated to IMF, so as to boost the World Trade, focusing in increasing the cash liquidity in the markets, a problem which struggles millions of companies today.
  • The poor countries will be helped by 6 billion dollars
  • Plus many more theoretical agreements, you know, the usual “We need to take action for this major problem” etc.

From theory to action: Time needed…
Stock markets were up yesterday, probably they will be today too. This is absolutely normal, as the whole World is searching for some good news since several months now. And the decisions of G20 summit were exactly this: Good news, a clear sign of hope for tomorrow, after thousands of problems, analyses etc.
But I want to remind you that unfortunately all these need time so as to become effective (and I personally consider that they are just the first part of the necessary measures). It is really great that the leaders of this World were able to agree, even if they had a different approach (“Spend, Spend, Spend” comparing to “Control and Regulate”) to the solution of the problem. Yet we need to wait so as all these measures to become reality, until the cash will flow into the markets. People tend to adopt the most optimistic scenario in every problem, probably because this is the most attractive one. But I would like to remind you that we all read thousands of analyses on WHY we reached this situation today. And in these analyses the no. 1 problem was not a cash shortage (which can be easily solved by injecting cash to the system). The descriptions of the problems mainly focused on the market’s anarchy, the lack of controls and regulations etc.
In my humble opinion, money is just the tool. If we don’t use this tool so as to re-construct a better and healthier economic environment, the problem will remain and it will return to us soon, in an even worse scenario. But to establish new controls and regulations, you need time. Even to have effects by injecting billions and trillions to the economies of the World, it takes time too. So…

We just know it will finally end, but we still don’t know when this will be…
… All that G20 summit really informed us is that the problem will be eventually solved. That the World leaders are responsible enough so as to let aside their egos and focus on creating a common better future. But this will take time. Now we know there is a strategy, which we will wait to see it being unfolded, being tested in practice, being measured for its results. The step is great, the biggest improvement we had since it all started.
Now we will wait to see the implementation of all these measures in World economy. And I will be curious enough to watch all these nice decisions (like the tax havens etc) becoming reality. Most probably in few months we will have a first “taste” of the new direction the World is attempting to take now.
Yesterday we finally saw that there is some light at the end of the tunnel. Now we need to measure how far is this end and to assure we will really march to it.