G'day Penners, Four speculative responses to this bit: >"We are seeing a global liquidity crunch, and the only solution is for the >>developing world to reduce interest rates if we are to avoid another >1987-style >crash," said Ian Harnett at BT Alex Brown. He predicted that >pan-European stock >markets would fall another 10 per cent. 1) Given the deep-seated (ie. social) and transnational (ie. as per the outmoded but very compelling dependencia thesis - and a brooding strategic dimension is also coming into view) nature of the problems that confront the world's economies, there is some reason to believe we have worse than 1987 before us. 2) I like the cheek of Brown and his ilk - those who have been demanding 'austerity' and radical interest-rate hikes for months now - suddenly blithely bemoan the third-world's reluctance to piss what's left of their currencies up against the wall with equally radical interest cuts - and anyway, aren't a lot of these countries stuck with obligations to IMF interest requirements? 3) I notice the USA is not being asked to risk its greenback and an overheated economy by dropping *its* interest rates. If 'globalism' means anything, it should imply that Fed rates are more globally decisive than 'developing world' (sic) rates, shouldn't it? And what room is there left for interest rate cuts in Japan? Mebbe Europe? 4) Either capitalists grasp the nettle and reintroduce currency controls or a great many of them can begin installing diving boards at their penthouse windows, I reckon. Krugman's saying it, China ain't budging from it, and surely Russia will have to do it. Who's gonna be next? This is gonna take one helluva bandaid, eh? Cheers, Rob.
