Posted on 04/14/2008 7:59:20 AM PDT by BGHater
Heres's a big lesson of the first international financial crisis of the 21st century: some old-fashioned economies are weathering the storm better than those that borrowed big to spur growth or those that bet heavily on debt-strapped American consumers.
The US, the economy at the centre of the turmoil, is dragging down world growth. On Wednesday, Federal Reserve chairman Ben Bernanke gave his most pessimistic assessment to date of the US economy's outlook, strongly suggesting that a recession was likely.
In testimony before Congress, he also said the Fed projected slower global growth over the coming quarters.
How the other economies fare could offer important insight that world leaders already are trying to glean.
Over the coming week, the global economy will be at the centre of discussions as finance ministers gather for the spring meetings of the International Monetary Fund and World Bank in Washington. At the top of their agenda: what steps to take to revamp global financial regulation, ease the global credit squeeze and boost growth.
Countries such as Australia, Brazil, the United Arab Emirates and Qatar are still expanding smartly, although down from 2007, because they have rich veins of high-priced oil, iron ore, alumina or copper. Old-line heavy machinery makers such as Germany and Japan are riding out the problem because they have diversified their markets.
On the flipside, consumer-goods exporters of Asia that rode to prosperity by trading with the US - Thailand, the Philippines, Malaysia and even China - are seeing their lofty growth rates sag. And the Baltic countries, Hungary and Iceland, which borrowed heavily to finance growth, are now watched by international financial institutions to see whether they will come unhinged by the credit squeeze.
(Excerpt) Read more at theaustralian.news.com.au ...
Sounds like the book of Revelations and the harlot dressed in purple and scarlet that sits atop the beast of seven kingdoms.
How about Russia in that line of thinking? They also have their own energy supplies in vast abundance while our politicians poo-poo coal liquification in the name of global warming avoidance.
They are number two and the reason they aren’t number one is because they are a massive IMPORTER, kind of like we are now. Interestingly, we are going through an asset depreciation/inflation period just like the Japanese in 1990’s. Is it coincidence we build very little and import almost everything?
If the US did what you suggest, the targeted governments would start spending the greenbacks they hold in reserves, while not purchasing any new US financials, which creates a one-way wealth transfer - The liquidation of US assets to cover other countries bills.
That’s how money works. Inescapable law of monetary economics #1.
Good point.
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