Thursday, September 25, 2008

America A Bankrupt Nation: Mahathir Was Right


Hantu Laut

President Bush appealed to the nation on Wednesday night to support the bailout financial package of $700 billion to avert a financial meltdown on Wall Street and a prolonged recession that could have serious repercussions on the nation and American people."Our entire economy is in danger" he said.

America is now in early stage of insolvency.Without the rescue package it would be a bankrupt nation.

In the 1997 East Asian financial crisis almost the entire East Asian countries were not spared the effect of the meltdown.The crisis was triggered by the collapse of the Thai baht in July 1997 which led to currency and financial crisis with domino effect that eventually affected other countries in the region.The financial anomaly led to recession in most of those countries.

However, the Malaysian economy and population were not as badly affected by the recession as compared to Thailand,Indonesia and South Korea.Although Malaysia indebtedness was quite high at that time the foreign debt was much lower and unlike Indonesia was not in default of its repayment.Its foreign liabilities did not exceed its foreign exchange reserves so the country was not in dire need of emergency credit facilities including those from IMF (International Monetary Fund)

The meltdown was due to highly speculative currency trading that was traced to one of the biggest fund managers and currency traders George Soros as the culprit who speculated in currency of the regions making billion of dollars for his hedge funds and himself and caused those currencies to collapse.Subsequently, the stock market collapsed and the KLSE Composite Index which stood at 1300 in early 1997 dropped to a low of 262 by September 1998. Mahathir the prime minister at that time blamed Soros and took defensive action to avert a financial disaster by pegging the ringgit.The peg slowed down the flights of capital and ended with war of words between Mahathir and Soros and criticism by the Western media and Western governments of Mahathir's unilateral action.Even his own finance minister at that time didn't agree with him and was one of the many things than that drove them apart.

The 1997 financial meltdown caused the Malaysian government to restructure and amalgamate its financial institutions and bailouts some of the troubled government linked companies

The American government was highly critical of Mahathir's political and financial policies at that time and didn't foresee that they would one day face even worse and more embarrassing situation.They accused Mahathir of bad governance,corruptions and a government that is not accountable to the people.

What causes the financial meltdown in America.A number of things and GREED is top of the list.

Highly speculative trading on Wall Street, over extended sub-prime sector, pay for failures CEO with huge paychecks, over-innovative financial system, poor financial governance and a society that live on credit.

The American stock markets and financial system are tailored to make the rich get richer. Short selling which is a dangerous form of share trading is rampant on Wall Street and financial institutions are willing to finance this risky business because they are conducted by big hedge funds and investment banks.

Britain is contemplating a permanent ban on short selling after the bashings of bank shares in the past weeks.Prime Minister Gordon Brown defending the recent ban said "when a group of people are exploiting a difficult economic situation, it is right to stop it." and said "I think you'll find new rules come in for the future...We have very unusual and volatile financial markets . It would be wrong for good companies to be brought down by speculators."

This will be the most expensive bailouts in the history of the US.Where are the money coming from ? Print more greenback, sell more Treasury Bills or go to war and sabotage the economy of other countries ?

If the American economy collapse and the greenback become useless many countries would go down with America. Their foreign reserves would be devalued and become almost worthless.

Mahathir was the only man who foresees this coming over a decade ago and the West ridiculed him and branded him as anti-Westerners.They condemned him for pegging the ringgit and the bailouts of some of the troubled government-linked companies during the Asian financial crisis.The man certainly has vision 20/20.

George W.Bush is going to put the money where his mouth is and hand over a very shattered economy to his successor.

The rest of the world have no choice.Rescue America or go down with it.

7 comments:

Anonymous said...

GUAN ENG: Only Anwar knows who's on crossover list PDF Print E-mail
Posted by St Low
Thursday, 25 September 2008 17:41

PETALING JAYA: Opposition leader Datuk Seri Anwar Ibrahim has held the list of Barisan Nasional MPs allegedly "crossing over" to the Pakatan Rakyat so close to his chest that even the DAP has not been privy to it.

DAP secretary-general Lim Guan Eng said the Parti Keadilan Rakyat adviser had also not revealed the list to Pas leaders.

"I have not seen the list and in my meeting with Anwar on Tuesday night, he told me that he has not shown the list to any Pakatan Rakyat leaders," he told a press conference at party headquarters yesterday.

Lim said the DAP still trusted Anwar despite the failure to reveal the list. According to him, Anwar had said that PR leaders would be shown the list at the right time.

Lim also suggested that Anwar be the '916' spokesman making him the only person allowed to make statements and comments on the progress of the "crossover".

(916 stands for Sept 16, Anwar's original crossover deadline. The figure has since been adopted by the Chinese press as a term for Anwar's plans of taking over the federal government via defections from the Barisan Nasional.)

"I think it is better to let Anwar do all the talking. There should not be too many people talking about this issue. Otherwise it will create confusion, undermining the credibility of Anwar," he added.

Lim said he had informed Anwar of the suggestion that he be made the official 916 spokesman.

On Tourism Minister Datuk Seri Azalina Othman Said's plan to spend RM18 million on a Web TV project, he described it as a waste of government funds.

Lim also introduced new staff to the press -- Teh Chi-Chang, former Citigroup Investment Research director, who will be Lim's new economic adviser and Leong Joo Ti, his strategic implementation and execution manager.

- nst

cyclone said...

I thought PAS claimed to have seen the list?????

Piggy Singh said...

Salam HL,

Since I don't read economy, what will be the impact to Malaysia. Will there be US based factories closing down, increase in unemployment and etc.

BTW, heard from Taman Melewar, PAS claimed to have had the EXACT number, but no names. The list held by PAS looks like this:
1.?
2.?
3.?
.
.
.
31.?
Bonus Track
32. ?
33. ?
34. ?
35. ?

Wassalam.

Anonymous said...

i believe the first man who told that in the future printed money will be no value than of falling leaves. That man is our prophet muhammad s.a.w...kiamat kecil dah nak mula...

kittykat46 said...

Wall Street's turmoil is bad and going to get worse. But its worthwile putting things in perspective.
The US Economy's Gross Domestic Product last year was $ 13.8 Trillion US Dollars.

They are living beyond their means, and need to get back to reality, probably with a loss of standard of living. But the US Economy isn't about to collapse.

Hantu Laut said...

kittykat46,
Most American live heavily on credit.Almost everything they own are bought on credit including their daily expenditure.

In the past only celebrities or the very rich can own over US$1 million house.Now, many working class American can own houses costing a million dollar or more because the financial system has gone completely haywire.It's so easy to borrow.

About the US economy not collapsing, don't be too sure, the 1930s depression started from the meltdown of Wall Street in 1929.

Thanks, you are the only one who stay on the track....I mean confine your comment to the subject at hand.

A.Horribilis said...

Please consider the lead story here, regarding Mahathir's dealing with Air Asia on our First Anniversary Sedition Edition

http://airasiaannus.blogspot.com/

Dr M might not be the shining beacon you thought he was after you've read it. Thanks very much.

Adilah