Notes From the Fieldby Martin Weil

August 2, 2014

Centennial of WW1

This week marks the 100th anniversary of the onset of the “War to end all wars,” a global conflict that started almost as if by accident and ended up killing 16 million people. “Home by Christmas” was the rallying cry for British soldiers leaving for what would be a four-year horror and bring about the dismantling of the British, Austro-Hungarian and Ottoman Empires. Prior to 1914, the Western world lived in a placid world with the most integrated global economy ever known. The war brought that global marketplace to a sudden stop in August 1914, not to be found again until the recent era.

Austria-Hungary declared war on Serbia on July 28, causing Germany and Russia to mobilize their armies on July 30. When Russia offered to negotiate rather than demobilize their army, Germany declared war on Russia on August 1. Germany declared war on France on August 3, and when Germany attacked Belgium on August 4, England declared war on Germany. Europe was at war, and millions would die in the battles that followed.

The impact on global stock markets was immediate: the closure of every major European exchange and many of the exchanges outside of Europe. Although no one would have predicted this result at the beginning of July 1914, by the end of the month, European stock exchanges were making preparations for the inevitable war and its impact.

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