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To: CIMA who wrote (26380)	1/17/1999 6:20:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116912

The above theory is predicated on a very shaky assumption that impoverishment and further impoverishment of Russia due to falling oil commodities, would not lead to social and god forbid Chernobyl type explosion (real prospect)and would destabilize the very same assumptions that there is no interconnection....Also regional conflicts such as India/Pakistan, Korea, Middle East are far more likely to be influenced by outside events that they seem to be.. Otherwise the author might very well critisize Marshall Plan...or emergence of stable Europe...

To: CIMA who wrote (26380)	1/17/1999 6:36:00 PM
From: IngotWeTrust	Read Replies (1) \| Respond to of 116912

While I applaud U, CIMA, 4 bringing global/local village argument to fore, I disagree w/the arguments cited in it. Y2K will abruptly bring us back to "local thinking", and in a very big hurry. How "global" we re-emerge is yet to be seen. If the depression economic cycle lesson of GLOBAL impact is to have taught USA'ers anything, we must conclude Y2K economic disruption will have a potential impact of 12-16yrs of economic rebuilding yet to be experienced, post Y2K. However logical for the local to global to local cycle to repeat itself, to think local to global to galactic is also being explored. I truly hope we don't colonize other planets until we understand how to get along w/diversity on this one! And get along WITHOUT the morally and economically depraved "too free willy" atop of THIS one! O/49r

To: CIMA who wrote (26380)	1/17/1999 7:56:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116912

Brazil Holds Meeting With U.S., IMF Sunday, 17 January 1999 W A S H I N G T O N (AP) BRAZILIAN AUTHORITIES met Sunday with U.S. officials and the International Monetary Fund, seeking ways to keep Latin America's largest economy from succumbing to an Asian-style currency crisis that could drag down other countries in the region. Private economists warned that investor sentiment could sour quickly unless Brazil moves much more forcefully to address underlying problems, including the government's huge budget deficit. Brazil was scheduled to provide details of its new currency regime early Monday before markets open. Brazilian Finance Minister Pedro Malan and central bank president Francisco Lopes held a series of meetings Saturday and Sunday with officials at the IMF and World Bank as well as the administration's point man for the global currency crisis, Deputy Treasury Secretary Lawrence Summers. Officials described the talks as a wide-ranging review of steps Brazil already has taken and what needs to be done to calm investor unease. Malan told reporters that Brazil may ask for early release of the next installment of the $41.5 billion rescue package that the IMF put together for Brazil in November. Brazil has received $9 billion already, and a similar amount was scheduled to be released next month. A Brazilian newspaper reported that Brazil was considering allowing the nation's currency, the real, to float freely against the dollar on a long-term basis, following the market's positive reaction to Friday's announcement that the government was abandoning temporarily its defense of the real. Financial markets around the world staged big gains on the news as investors demonstrated relief that the government of President Fernando Henrique Cardoso would no longer be wasting the country's dwindling foreign reserves to prop up the currency. But analysts warned that during the 18 months of the current economic crisis, which began in Thailand on July 2, 1997, markets often have staged brief rallies on news that countries are giving up defense of their currencies only to plunge in later days as pessimism returns about a country's overall economic prospects. "You won't have anything like the possibility of lasting stability until you see a lot more in terms of reforms on the part of Brazil," said C. Fred Bergsten, a Treasury official in the Carter administration and now head of the Institute of International Economics, a Washington think tank. "If Brazil fails to do the things it needs to restore confidence, then you could have quite a bout of new contagion," Bergsten said. "It could spill over into the rest of Latin America, most notably Argentina, and countries outside the region as well." Bergsten said that Argentina, Hong Kong and China are most at risk from further market instability because they are all still trying to maintain fixed exchange rates with the dollar, rather than the more prevalent practice of allowing a nation's currency to be traded freely with the price set by what buyers are willing to pay. Countries maintaining fixed exchange rates reap benefits in billions of dollars pouring in from foreign investors who have no fear that their holdings will be wiped out suddenly by a currency depreciation. But as experience has shown, such investment can flow out just as quickly when investor sentiment turns and worries intensify that countries will be forced to give up fixed-rate currency regimes. The Clinton administration persuaded the IMF to put together a pre-emptive $41.5 billion credit line for Brazil, hoping that amount along with Brazil's own reserves would be enough to convince foreign investors that Brazil would not have to devalue. Carodoso's government was unable to win approval in Brazil's Congress of budget cuts and tax increases needed to shrink the government deficit, however, which caused investors to grow nervous and begin another rush for the exits. Those developments last week shattered what had been a two-month period of relative calm in global markets after the U.S. Federal Reserve rode to the rescue last fall with a series of three interest rate cuts to avert calamity. "The only option Brazil had was to devalue and hope it goes in an orderly manner and doesn't spin out of control," said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis. He said the initial signs were encouraging, given that Brazil goes into the crisis with larger reserves than other nations that have gotten into trouble and a better track record under Cardoso of managing its economy.