“Africa must be present,” said Senegalese President Abdoulaye Wade. He said most African countries were ignored colonial outposts when the Bretton Woods system of monetary management, the International Monetary Fund and the World Bank were created. “We keep inventing mechanisms to deal with new problems without fundamentally changing systems. Now that we are talking about fundamental change, we must be present,” Mr. Wade said.

In the US, for example, on a 1929 = 100 base, the CPI index in 1933 was 73, and in 1940 was still just 81.

There was a further period of enforced price stability during the War, which had a clear impact during 1943-45, after mild inflation during 1941 and 1942. It wasn’t till 1946 that prices caught up to pre-1929 levels, and 1947 was high inflation (relatively speaking) in the US – 15% ! (Anecdotally, something similar happened in India, complicated by Independence). 1950s were even more stable price-wise in the US than the 1940s had been, though that is another story.

So in estimating the impact of a depression on the very poorest people, perhaps lack of income will negate any positive impact that a decline in prices has on purchasing power. This could kill them off. But for the middle class, and people on fixed incomes, the deflationary impact can be a good thing, provided they don’t have fixed interest debts.

Just thought I’d throw that in.

I don’t think things will be as bad as the Great Depression this time, but I think we’re naive if we think the fall-out won’t a) hurt, and b) have a disproportionate impact on the survival of those at the bottom of the income spectrum.

but it changed the world. Bretton woods came about through that – and that shaped how the globe helps out the basketcases (IMF), supports the relatively well to do (WB) and brings down trade barriers (WTO). Before this the world operated as separate economic fiefdoms.

the equivalent of 1944′s Bretton Woods as a distinct possibility in november – when a new economic world order will be shaped – this time with the BRIC. Prez GWB has nixed the possibility but Brown, Merkel and Sarkozy are keen on it. Bretton woods I led to the IMF, WTO and WB. things are so serious that the status quo needs to be shaken up. Despite the drop of over 40% in the stock markets for BRIC, the world looks to them for growth – currently their growth rate is expected to exceed 6% annually even as the developing world trudges around at sub 1% growth Y2Y. one of the outcomes has to be an active engagement of the BRIC.