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Interest Rate Blues: Emerging Nations Demand Western Support

Thursday, February 20, 2014 - 9:42 AM
“At the G-20 finance ministers' meeting in Sydney, emerging economies will push for joint action to halt rising interest rates. Representatives from India, Brazil and Turkey in particular accuse the US Federal Reserve, under the leadership of new head Janet Yellen, of having severely handicapped their economies by backing away from the crisis driven policies it has pursued in recent years."

http://www.spiegel.de/internation...flailing..
4
ShorebreakShorebreak2,622 posts since
Apr 6, 2010
Rep Points: 14,216
1. Thursday, February 20, 2014 - 3:20 PM
What bothers me the most about this is that "Emerging Nations DEMAND Western Support".  They are not asking for our support, they are "demanding" it.  Somehow this rubs me the wrong way.  What gives them the right to demand anything of us?.  Is the US's image in such bad shape that Emerging Nations can make Demands of us??  I guess they will be making sure that their demands are heard by Yellen and she will oblige them.
3
paoli2paoli21,372 posts since
Aug 10, 2011
Rep Points: 6,011
2. Thursday, February 20, 2014 - 4:04 PM
“A majority of the large emerging economies (Indonesia, Brazil, Russia, Turkey, and Argentina, but not China) unwisely relied on large inflows of abnormally cheap foreign capital, rather than domestic savings, to finance growth-sustaining investments. As a result, their current-account balances deteriorated in the post-crisis period. Now, with the onset of monetary tightening in the advanced economies, the imported capital is leaving, in a slightly panicky mode, creating downward pressure on exchange rates and upward pressure on domestic prices. The adjustment now underway requires launching real reforms and replacing low-cost external capital with domestically financed investment.”

http://www.project-syndicate.org/...dramatic..
2
ShorebreakShorebreak2,622 posts since
Apr 6, 2010
Rep Points: 14,216
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