This could be the week when the greatest financial crisis in history finally reached its nadir. Then again, it could merely be another week in which a brief rally in global stock markets has suckered more investors, politicians and commentators into assuming that the worst is over, when the tentative improvement in financial confidence is just another false dawn.<\/p>\n
So which will it be? The answer depends, even more than usual, on the finance ministers and central bankers gathering at a potentially chaotic G20 meeting this weekend. The omens are not benign.<\/p>\n
It is now understood that the global financial system can be stabilised and economic demand revived only through government intervention. Private businesses and consumers do not have the access to credit or the confidence to start spending and investing again. But government intervention will work only with some degree of international co-operation and that requires leadership from America. Yet despite the mandate won by President Obama, Washington has proved muddled in its economic priorities and indecisive in its financial response to the crisis.<\/p>\n