Last week, on 11-11-11 (at 11am to be precise) was Remembrance day. We definitely do have to remember and give respect to the poor guys who died during the global butchery known as WWI and more generally to all the victims of war. It’s always a good opportunity to realize how lucky we are nowadays, of course it looks like we're going back into a deep crisis, the Recession strikes back and we’ll probably struggle but at least we don't have to fight in trenches with 5 minutes of residual life expectancy. If you read this, it means you're alive and you have an internet connexion, so stop whining! Now I think what we can't remember enough about the Great War is the timeless ability of politics and ruling leaders to shoot themselves in the balls. In the case of the WWI, it was about more than a few pairs of balls, the impact was even deeper than 9 millions of killed combatants: the guys who decided to go to war (and hold it so long) totally screwed the whole old Europe. As described in the prologue of the (excellent) Lords of Finance by Liaquat Ahamed, in 1909 Norman Angell a journalist (who was awarded decades after the Nobel Peace Prize) argued in Europe's optical illusion that the Economy had then reached such a level of global interdependence that a war involving the major European powers would be a total economic non sense with no benefit for anyone. For him, because of this, no major conflict could possibly break and even if it did by accident, it would end very quickly. History showed him both wrong and right. Wrong, dead wrong because as we all know, the war broke, lasted 4 years and indirectly led to a second one. He was also wrong because actually the war economically benefited to the United States, a country that had then 150 years of history that became Masters of the world. The FED, then (literally) a Gentlemen's club, ended up with most of the world gold as the precious metal massively fled from the old continent at war. Thus, November 11th should be also the celebration of the US supremacy, WWI was its start. On the other hand, Angell was also right: the war was an economic non-sense and it totally ruined the European powers involved. One of the implications of the WWI (the Treaty of Versailles to be precise) was the hyper inflation Germans experienced in 1923, with at the worst prices doubling every 4 days (+20% daily). And while inflation was experienced by their (great) grand parents, the German today still fear it and it is the base of the German position towards ECB, its potential money printing and its recent clash with French. My point of view on this precise point has not changed since the beginning of the European debt crisis and was discussed in my post "Dona Merkel Quichotte vs the mills of inflation" dated June 2010.
Back to the WWI as we could see, the decision to go to war has still some profound implications today, almost one century after. It appears afterwards as a disastrous decision economically, now was it politically justified? I really don't know but if we have a look at the bunch of world leaders we have today, we could assume the events that escalated into a war were just the result of attempts from a few assholes in charge to flatter their own ego and prove them right and I'm sure we wouldn't be that wrong. OK, I shouldn't use the current stories to find out about the past and do the other way around, I know, I know. The lesson of the past is, and that's a bit scary, that the future of World, the Economic situation, the resolution of the crisis, the future growth etc have always been depending on the decisions of only a handful of guys. And in the case of Europe, looking at the handful of leaders who act sometimes like children in a playground (or orgy like Roman Emperors but fortunately Berlusconi is gone and DSK didn’t make it to Presidency), but the good news is, as one can see in an article on Bloomberg "Europe's insult diplomacy" (and see the chart below) : among European leaders, Love is in the air...
|Source : Bloomberg, Europe's Insult Diplomacy|
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