I've been watching a slow motion implosion since last August that began with the collapse of two Bear Stearns hedge funds. We're definitely on track for something like the Great Depression, only long and financially painful. I think we get knocked back to a 1940 standard of living very shortly and we're going to have to fight to hang on to that in the face of peak oil. We here in the U.S. associate the year 1929 with the beginning of the Great Depression but the roots of it really took hold in 1931 with the collapse of the Austrian banking system. Today we face some definitely scary parallels with what is happening in Iceland. Little Iceland, population 315,000, could knock the United States, a thousand times larger, right over, should their banking system let go. And it appears it might.
I've been watching a slow motion implosion since last August that began with the collapse of two Bear Stearns hedge funds. We're definitely on track for something like the Great Depression, only long and financially painful. I think we get knocked back to a 1940 standard of living very shortly and we're going to have to fight to hang on to that in the face of peak oil.
We here in the U.S. associate the year 1929 with the beginning of the Great Depression but the roots of it really took hold in 1931 with the collapse of the Austrian banking system. Today we face some definitely scary parallels with what is happening in Iceland. Little Iceland, population 315,000, could knock the United States, a thousand times larger, right over, should their banking system let go. And it appears it might.
Isn't this just the thing that chriscook is always saying might happen? Any idiot can face a crisis - it's day to day living that wears you out.
The funny part was that the journalist put it and Kazakhstan in "Central and Eastern Europe". When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
With some economies under siege, deciding how quickly foreign capital could race for the exits has rarely been more important for investors. Refinements in the models used to assess this throw up some surprises.Sharp falls in the currencies of Iceland, South Africa and Turkey since the beginning of the year demonstrate investors' growing aversion to economies with large external deficits and high dependence on capital inflows. Evaluating this dependence means looking at different indicators - the size of current account deficits relative to gross domestic product, the need for foreign currency to service debt and the amount of foreign exchange reserves. On these metrics, the most vulnerable countries in central and eastern Europe, the Middle East and Africa are Iceland, Latvia, Turkey and Romania. Kazakhstan, conversely, does rather well - its forex reserves are triple estimated debt repayments over the next year.
Sharp falls in the currencies of Iceland, South Africa and Turkey since the beginning of the year demonstrate investors' growing aversion to economies with large external deficits and high dependence on capital inflows. Evaluating this dependence means looking at different indicators - the size of current account deficits relative to gross domestic product, the need for foreign currency to service debt and the amount of foreign exchange reserves. On these metrics, the most vulnerable countries in central and eastern Europe, the Middle East and Africa are Iceland, Latvia, Turkey and Romania. Kazakhstan, conversely, does rather well - its forex reserves are triple estimated debt repayments over the next year.
You know, I really would like to see that plot including all OECD countries and not just "emerging markets". When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
