No single day will pass without some bad news of a bank getting in trouble caused by American mortgage-backed securities. But what about the Asian economies? Did they get in trouble despite the facts that they have $3 trillion in foreign currency, well capitalized banks that are hardly interested in those corrupted American bank products?
Unfortunately yes. Real estate prices are going down from Seoul to New Delhi. Singapore’s economy just entered a recession and some indicators even announce a coming recession in Japan.
What could be the cause that those growing economies gets into trouble?
Well, a important reason is the fact that all those countries depend heavily on our western dollars and euro’s. And now we, the west, are in the middle of a recession. We do not longer import as much as we did before. India for example announced that they growth was limited with only a +1.3%. Some people will say that’s still a good result in this worldwide crisis. It is, but when you know their growth was +7.4% in July you see that also they suffer from it.
It’s sad that the employees of those small companies they job get threatened due to our bank problems.
Who could help them with financial injections, loans etc? Surely not the United states since they already have difficulties in saving their own economy. So more and more people look toward China. China always was and still is an enormously powerful hound that charged ahead every obstacle on its way. Maybe China can confirm its status as a economical super power, equal or maybe even better then the US.
Source: http://www.iht.com/articles/2008/10/10/business/asiaecon.php
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