Monty -
That's what those idiots have been doing in the last 10 years. They went beserk wanting to catch up to US standard of living and borrowed heavily without any backbone to back up all that spending. The result is severe and total collapse of the economy, i.e. bankruptcies. They don't know that we spent hundred years to develop the backbone of our economy and gradually raise our standard of living. They want to do it in 10 to 20 years. They had super hyper inflation in the last 10 years, where everything went up in value (i.e. irrational exuberance), because all that money and loans were easily available. Then one day, when their economy slowed down a bit (slower growth), they found out they had much overspent their real budget and everything was overpriced out of reality. Hence the crescendo of business failures, bankruptcies and finally total collapse.
The banks were too loose with loans and ended up with too many bad loans that they cannot collect. Bank of Japan has nowhere to go, but get bailed out by the Japan government and that means print more yen. That article mentioned how we resolved the RTC problem, but forgot to mention the required backbone needed to enable that bailout. I am afraid these developing countries don't have their own backbones. They expect and are crying for mighty Uncle Sam's $$$ to bail them out. Isn't that ridiculous? But that's the price we have to pay, like it or not, for being top dog in the world.
We can be thankful the Feds and Bundesbank are both doing their utmost best to prevent such hyper inflation and to avoid severe recession. Bundesbank, in particular, is very stringent in curbing inflation, because of their experience in the late 1030's and 1940's. |
