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GLD 375.93-1.8%Nov 14 4:00 PM EST

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To: elmatador who wrote (103523)10/30/2013 11:43:06 PM
From: Snowshoe  Read Replies (1) of 217818
 
Something else to fret about...

Asian crisis looms and Fed is to blame
Commentary: Flashbacks to debt and currency ‘death spiral’

marketwatch.com

By Michael Casey
Oct. 30, 2013, 11:32 a.m. EDT

Don’t look now, but another Asian crisis may be brewing — courtesy of the U.S. Federal Reserve.

A paper recently published by the Bank of International Settlements — a multilateral club of monetary authorities that includes the Fed as a member — noted that central bank bond-buying, or “quantitative easing,” has made dollar-based loans so cheap that Asian companies are ramping up their borrowing in greenbacks. The paper’s authors fear that once the Fed and the Bank of Japan eventually turn off their liquidity taps, rising dollar interest rates will leave these Asian debtors unable to pay back the money.

That should trigger uncomfortable memories of the debt and currency “death spiral” of 1997-98, when plunging local currencies fueled a crisis in Asia that spread financial contagion around the world.
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