THIS CRISIS is not an Asian crisis - it's a global emerging market crisis. The distinction is important, economists say, because, if there is nothing inherently Asian about the causes of the crisis, Latin America and Eastern Europe could easily be the next victims of economic turmoil. Economists say that the currents that contributed to the crisis are still at work because there are fundamental structural flaws in the global financial system.
THESE MERRY-go-round politics have sent a ripple of panic through the West. The rouble's difficulties were echoed in the plight of other national currencies. The financial markets' fears of a Russian collapse have led to demands that the West stop bailing Russia out, and the Russians solve their own financial problems. It is a solution as blind as the panic that spawned it.
NOT A day passes without more monetary, financial or economic bad news. After Russia, which will be the next country to founder? One very dark scenario could be possible a Latin American recession, which would shake Wall Street and provoke mass panic and huge withdrawals in American households. Psychological phenomenon have taken on such importance in contemporary economics that turnaround can never be ruled out. The world economy is now in the hands of the markets. The Asia crisis hasn't led to the general ruin which some predicted. But it has taught us that economic matter has become explosive.
ALARM BELLS are ringing in financial capitals around the world. If the run of seven fat years on Wall Street is about to end, are seven lean years to follow? American investors now seem persuaded that, for all the Federal Reserve's concerns about inflation, it is the deflationary spiral they should fear. Deflation could be the thing that ultimately unravels the United States stock market.Reuse content