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Recurring Global | Global Financial | financial crises
Recurring Global Financial | global financial crises

Recurring Global Financial Crises Topic in The Credit Debacle Catalog

Mon 2010-05-24 10:55 EDT

The Root Cause Of Recurring Global Financial Crises

Henry Liu

Severe global financial crises have been recurring every decade: the 1987 crash, the 1997 Asian financial crisis and the 2007 Credit Crisis. This recurring pattern had been generated by wholesale financial deregulation around the world. But the root causes have been dollar hegemony and the Washington Consensus...The Washington Consensus has since been characterized as a ``bashing of the state'' (Annual Report of the United Nations, 1998) and a ``new imperialism'' (M Shahid Alam, ``Does Sovereignty Matter for Economic Growth?'', 1999). But the real harm of the Washington Consensus has yet to be properly recognized: that it is a prescription for generating failed states around the world among developing economies that participate in globalized financial markets. Even in the developed economies, neo-liberalism generates a dangerous but generally unacknowledged failed-state syndrome.

Recurring Global Financial Crises; root cause.

The Money Game Sat 2010-05-22 21:47 EDT

The Root Cause Of Recurring Global Financial Crises

Henry Liu

Severe global financial crises have been recurring every decade: the 1987 crash, the 1997 Asian financial crisis and the 2007 Credit Crisis. This recurring pattern had been generated by wholesale financial deregulation around the world. But the root causes have been dollar hegemony and the Washington Consensus. -- The Case of Greece --Following misguided neo-liberal market fundamentalist advice, Greece abandoned its national currency, the drachma, in favor of the euro in 2002. This critically consequential move enabled the Greek government to benefit from the strength of the euro, albeit not derived exclusively from the strength of the Greek economy, but from the strength of the economies of the stronger Eurozone member states, to borrow at lower interest rates collateralized by Greek assets denominated in euros. With newly available credit, Greece then went on a debt-funded spending spree, including high-profile projects such as the 2004 Athens Olympics that left the Greek nation with high sovereign debts not denominated in its national currency...

Money game; Recurring Global Financial Crises; root cause.

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