In November 1975, at a summit meeting in the picturesque Château de Rambouillet near Paris, leaders of the six richest industrial powers gathered to form a rather exclusive, though completely informal, little club.
Takeo Miki, Prime Minister of Japan; President Gerald Ford of the United States; the United Kingdom’s PM, Harold Wilson; West German Chancellor Helmut Schmidt; and Aldo Moro, Prime Minister of Italy, joined Valéry Giscard d’Estang, the French President, in establishing what was tagged the “Group of Six” or, as it would become known in today’s AOW (abbreviation-obsessed world), the G-6.
A year later, upset at being left out of the club, Canada applied for and was granted membership after a month-long pledge drive in which Prime Minister Pierre Trudeau had to shotgun a six-pack of Molson, ride a moose bareback through the streets of Montreal, and ring the doorbell at the White House and run away.
Thus was borne the Group of Seven (G-7 — see how this works? Pretty clever, huh?).
The G-7 would meet informally (at enormous taxpayer expense) in a few dive bars like the Dorado Beach Resort in Puerto Rico, the Schaumburg Palace in Bonn, the Akasaka Palace in Tokyo, and the San Giorgio Maggiore in Venice; and at these gatherings the attendees would eat gourmet meals, quaff the finest wines, and discuss how to make the world a better, fairer place ….
Anyway, the little club remained closed to outsiders until, in 1997, UK PM Tony Blair and US President Bill Clinton invited Russian President Boris Yeltsin to pop along to Naples to observe the G-7 on the understanding that full membership in the club would be forthcoming.
To nobody’s surprise, in 1998 Russia participated in its first informal gathering, and, hey presto, the club was now....? Come on....? Yes, you’ve got it, the G-8!
Among its members, in 2012 the G-8 accounted for 50.1% of nominal global GDP:
Source: United Nations
The G-8 essentially encompasses the top third of the world….
Anyway, amidst the ongoing turmoil in and around Ukraine and in amongst the threats and counter-threats this past week, was a movement, led by Britain’s David Cameron, to punish Russia’s President, Vladimir Putin, by telling him he was no longer part of this very exclusive club:
(UK Daily Telegraph): The Group of Seven big economies (G7) should cancel a meeting with Russia in June, British Prime Minister David Cameron said on Monday as world leaders kicked off a two-day nuclear security summit in The Hague.
“We should be clear there’s not going to be a G8 summit this year in Russia,” Mr Cameron told reporters ahead of a hastily-convened meeting with other leaders of the G7 — a group of industrialised nations that excludes Russia, which joined in 1998 to form the G8.
The other six members of the G-7 rallied round Cameron and agreed that the upcoming summit in Sochi, scheduled for June, would be moved to the bright lights of Brussels and Russia would be excluded — though they were at pains to point out that the exclusion would be temporary.
Having been slapped across the back of the legs, it was time for Putin to make the promises necessary to reingratiate himself with the giants of the G-7, like François Hollande, who talked tough as Russian troops casually wandered into sensitive military installations in Crimea, meeting precisely zero resistance:
(Reuters): “We have to also think about other sanctions if there is an escalation,” French President Francois Hollande said before the summit. “If there are illegitimate claims, if there are troop operations, if there are threats, then there will be other sanctions.”
However, just when the G-7 had Vlad the Invader right where they wanted him, he outmaneuvered them in a manner that could potentially shift those sands I was talking about in previously unfathomable ways….
Click here to continue reading this article from Things That Make You Go Hmmm… – a free weekly newsletter by Grant Williams, a highly respected financial expert and current portfolio and strategy advisor at Vulpes Investment Management in Singapore. The article Things That Make You Go Hmmm: Fight Club was originally published at mauldineconomics.com.
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