In the early ’90s, East Asian countries had liberalized their financial and capital markets—not because they needed to attract more funds (savings rates were already 30 percent or more) but because of international pressure, including some from the U.S. Treasury Department. These changes provoked a flood of short-term capital—that is, the kind of capital that looks for the highest return in the next day, week, or month, as opposed to long-term investment in things like factories. In Thailand, this short-term capital helped fuel an unsustainable real estate boom. And, as people around the world (including Americans) have painfully learned, every real estate bubble eventually bursts, often with disastrous consequences. Just as suddenly as capital flowed in, it flowed out. And, when everybody tries to pull their money out at the same time, it causes an economic problem. A big economic problem.

This was being reported by The New York Times yesterday:

[T]he Bush administration is [...] leaning on foreign governments to pitch in with bailout programs of their own as needed. “We have a global financial system and we are talking very aggressively with other countries around the world, and encouraging them to do similar things, and I believe a number of them will,” [Henry] Paulson[, US Treasury secretary,] said on Sunday.

The Christian Science Monitor also has an article on Muslims in China “forging economic ties with the Muslim world”.

“There is a thinking that goes something like, ‘Why when we go to Europe we wear suits, but Europeans who come here don’t wear dishdashas; that I have to speak English and other languages in my own country?’”

It is, as people will recognise, a scandal that 40% of the oil is controlled by Opec, that their decisions can restrict the supply of oil to the rest of the world, and that at a time when oil is desperately needed, and supply needs to expand, that Opec can withhold supply from the market.”

One of the US politicians sponsoring the bill to sue the oil cartel said Americans are “at the mercy” of Opec.

This had me searching for a Joseph Stiglitz article from back in 2000 in which he explained that, basically, South East Asian economies were at the mercy of the IMF (and its powerful sponsor nations).