This Reuters article has some interesting global reaction to the government’s bail-out of AIG. But what I find really rich is the following excerpt:
“The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States,” Shi Jianxun, a professor at Shanghai’s Tongji University said in the overseas edition of The People’s Daily.
So now the parasitic, overpopulated economies of the world who prey on America’s market to support their bloated labor forces have the gall to complain about the side effects. Just exactly what did they expect would happen when they had finally drained every last drop of blood from America’s economy? Did they think that the United States is like a “white hole” of dollars – a financial equivalent of the theoretical astronomical phenomenon that gushes matter into space from an invisible and seemingly limitless supply?
In my 2008 Predictions, I forecast another Asian financial crisis like the one in the late ’90s. As the recession is beginning to spread across the globe, currencies in Asia are falling as the competition for the shrinking American market intensifies. The following excerpt from this same article may be an indication that it’s begun:
Bank of Korea Governor Lee Seong-tae said the credit crisis triggered last year by U.S. mortgage defaults would drag on and hurt the global economy.
“We need to prepare for potential foreign fund outflow from the bond markets in the medium term,” he said.
Capital has been fleeing emerging markets as investors stung by the upheaval on Wall Street shun risky assets. Seoul has spent more than $30 billion this year to support the won, which has tumbled 17 percent in 2008 against the dollar.
India’s central bank has sprung regularly to the rupee’s defense, buying it in the currency market and exacerbating a shortage of local currency. After the rupee’s biggest one-day fall in a decade on Tuesday, the central bank said it would make it easier for banks to get cash. On Wednesday, it injected 47.36 billion rupees ($1.01 billion) into the banking system at the first of its tenders.
Those who believe that last night’s government bail-out of AIG has averted a global financial calamity are in for a rude awakening. It’s done nothing to address the fundamental problem – that the global economy is predicated upon the United States functioning as a financial white hole, gushing money endlessly into the rest of the world. Now, perhaps too late, we can peer down into that hole and see that the well has run dry.