Myth 157 - The American Financial Myth

What goes round will come around. The Asian financial crisis that battered Asian economies and made them look like little boys in the world of high finance, and making the West looked like school masters having a thing or two to teach the unsophisticated Asian govt, was a humiliating experience to say the least. And IMF came around, with the Americans in charge, dragged the little Asian boys by the collar and cane on the other hand, and reprimanding, these are the things that Asian govt must do. No buts. Asian govts were told to open up their books, revealed all the bad debts, more transparency, more regulations and controls, no more subsidies, closed down badly managed financial institutions, basically, to get their straw houses in order with strict financial control, thrift and prudent govt expenditure. The Asian economies were badly managed, or Asians just could not manage them and needed the expertise of the West to clean up their acts. It is time Asian govts pop over to Washington and see what Asians can do to help the Americans. They have badly mismanaged their financial institutions and are literally broke. Not only the sub prime loans but also huge trade deficits and wild and unrestrained spending. How about Mahathir going there, representing Asian financial institutions, carrying a bag of goodies and a cane and telling Bush to pull up his socks? Imagining Mahathir telling Bush to rein in all the bad debts, closed the loss making institutions down, tighten belts, no more deficit spending, no more money for wars, and more regulatory controls and transparency? And if all these still fails to bring back the American economy to health, Mahathir can teach them to stop the greenbacks from trading and fluctuating freely. Fix the exchange rate for the greenbacks, institute currency control and stop speculations. That would be the American nightmare. What happens to all the world class financial gurus? How could America's financial institutions be so badly mismanaged and allowed to go on for so long? Did they know what the hell was going on or do they know the fundamentals of economics? Cheap loans, high credit risks, deficit budget, are all the ingredients to a major economic crisis. The next thing that will come around are the diseases on livestocks and natural disasters that the Asians are experiencing. You cannot run. It will come around.