FLORENCE – Summer is a time for beaches and relaxation – and, historically, for all sorts of destructive crises. Time and again, it has proven dangerous for the world to be on holiday.
August is an especially bad month for financial markets. On August 15, 1971, President Richard M. Nixon ended the commitment of the United States to a fixed gold price, and since then the world has lived with currency volatility and instability. On August 13, 1982 (a Friday), Mexican Finance Minister Silva Herzog went to Washington to tell the International Monetary Fund and the US government that Mexico would be unable to make its scheduled debt payment the following Monday. On August 17, 1998, Russian Prime Minister Sergei Kiriyenko announced that his country would simultaneously default and devalue. And in the first week of August 2007, IKB Deutsche Industriebank disintegrated, as the US subprime crisis spread.