The Asian Slump: Will It Become a World Depression?

A thunderbolt is about to strike the American and European economies according to the analysis of one US economist. How will the Asian crisis reach the shores of America and Europe? The currencies of the Asian tigers and Japan have declined sharply in recent months. Their exports have become cheaper abroad and imports have become expensive at home. They have also seen business closures and layoffs. Asian consumers have been cutting back on their household …

…Interest rates could also fall in Europe, especially in Britain, France and Germany. Even the debt-ridden Italy could see a decline in bond yields, but they will rise in the third world and, at least initially, in the economies of Asian tigers. These will just be the immediate effects of stock market crashes. Once the New York exchange suffers a melt-down, capital will flow out of the United States. US interest rates could then rise.