A rising tide of capital controls

November 19, 2009

jamessaft1.jpg(James Saft is a Reuters columnist. The opinions expressed are his own)

Easy money in the United States, a falling dollar and growing flows of funds seeking better returns in emerging markets are touching off a new round of capital controls in hot emerging markets, a trend that could accelerate and will at the very least increase market volatility.

It shouldn’t be a surprise, really; loose money in the developed world is helping to spur investment into emerging markets, driving currencies up and making local exports less competitive for countries which, unlike China, aren’t hitching a free ride as the dollar declines.

Inflation may be a threat for many of these, but with the global economy still struggling, it certainly won’t feel that way to policy makers.

Russia on Wednesday joined the list of countries eyeing new measures to stem currency speculation and appreciation. Moscow was careful to say it would not impose actual capital controls, which seek to regulate flows of funds into or out of an economy, but the measures they are considering would have exactly that effect, making it tougher or more expensive for money borrowed abroad to be brought into Russia.

Kazakhstan, which has been intervening actively to slow the ascent of its tenge currency, has introduced legislation allowing capital controls, but so far has not used them.

Indonesia said this week it will consider curbs on foreign holdings of short-term official debt, sending its rupiah into a brief swoon until central banker Hartadi Sarwono damped things down by saying currency moves based on such flows were so far manageable.

Elsewhere all across developing Asia central banks have been intervening to cap gains in the value of their currencies, with Taiwan going so far as to ban foreign funds from investing in local time deposits.

Brazil last month announced a 2 percent tax on foreign investment in stocks and fixed-income securities to limit the strengthening of the real.

International Monetary Fund chief Dominique Strauss-Kahn gave the fund’s standard line to the Financial Times: “The IMF would not recommend them as a standard prescription … as they carried costs and were usually ineffective”.


Ineffective over the long run they may be, but tempting they are in the short term. The very fact that India and China have emerged relatively well from the crisis and have resumed growth in strong fashion gives courage to those considering their own measures. And really, the very idea of an orthodox allegiance to free flowing markets ensuring the best outcome for all now looks pretty 1999. Malaysia attracted a firestorm of criticism when it imposed controls in the wake of the Asian crisis in the 1990s. There was much talk of how investors would go away and not come back, how development would be retarded and Malaysia ultimately would rue the day. None of that has come to pass, and those same investors proved quite willing to come back if the returns looked good enough, as indeed they did.

But Malaysia, along with Chile, were outliers when they imposed capital controls. What will it mean if it becomes not a tool of desperation but a standard policy when hot money flows? There must be a risk that capital controls become part of an escalating series of beggar-thy-neighbor steps taken by countries fighting over the scraps of a diminished U.S. and European appetite for imported goods.

If, in other words, these controls are a temporary phase to ease the transition to stronger currencies, the risks might not be that high. I’d worry that developed market interest rates are going to stay low for a very long time. That means that the grand emerging markets carry trade of borrowing in dollar to speculate for appreciation elsewhere will, as it did in Japan, build and build.

At the same time you have to look at why interest rates will stay so low for so long. My bet is that it is because consumption in the developed world will be under structural pressure as debts are repaid. So the money flows into emerging markets and drives up currencies, but unless domestic consumption in China and India really takes off there will not be a very good market for exports. That will make newly strong emerging market currencies all the harder for those countries to tolerate, economically and politically. If China does not do its part and allow its currency to appreciate, the argument will be all the more stark.

It may or may not be a good idea, but one thing I would not count on is coordinated and globally sanctioned capital controls, as espoused by Arvind Subramanian, a senior fellow of the Peterson Institute.

The U.S. simply won’t wear it.

Look then for more unilateral controls and more volatility as speculation of all kinds grows.

(At the time of publication James Saft did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund.)


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I pity those countries in Asia caught among a declining Greenback, steady and low Yuan, and an appreciating local currency.They can’t survive without intervention from Central banks.Many Asian countries are export-led. A declining Greenback is hitting them very hard. On top of that, they have to compete with cheap China-made goods.If they do not do anything to halt the gain of the local currency, they are going to face a major economic, possibly a political, diaster.

Posted by scheng1 | Report as abusive

The US doesn’t seem to follow any long term objectives. Wall Street financiers do not seem to care what happens even ten years forward.Why would the emerging markets open themselves to an orgy of speculation like that which infested our domestic real estate for the last ten years or more?The developed world is a place where the only thing that seems to matter is how to make money with money and the only thing it is interested in are things that will do that quickly. The investors of the developed economies do not have much interest in the mundane things like infrastructure, transit systems, public schools or clinics, low income housing etc. Those unglamorous and less profitable – at least in the short term – ventures do not attract them. Those are something the governments of the developed world are expected to deal with through taxation or using UN and NGO development funds.The billions spent by the US in Iraq seem to have been spent stupidly on all sorts of very expensive projects – but built by US contractors at US rates of pay and hiring mostly US workers for the better paying managerial jobs and perhaps for some of the actual construction work – but I have never heard that any Iraqi’s were actually employed or at what. The locals now have the buildings and equipment but little or no staff to run and maintain them. Evidently few Iraqis ever benefited from the development funds. It’s almost naive to expect that they would. They weren’t supposed to. Those projects were a way the big contractors could enrich themselves with Federal funds with little or no competition for the contract. Saddam was evidently able to find many home grown developers – Baghdad was not all Sadr City. And whatever one thinks about the the dictators “taste” he certainly had an eye for quality materials and good construction. Why did the US have so little interest in supporting the local entrepreneurs?When The US invested in the German economy after WWII, it did so through many local employers who had worked for the former regime. It didn’t try to replace them all with it’s own people. The locals knew what to build and where to build it. The Marshall plan was evidently administered by people who really knew what a program of national reconstruction should be and were more interested in the long term prospects and stability of Germany than in the short term gain for its rabid investors.It’s obvious the developing countries know our history better than we do and are determined not to let the big guys buy and sell them for their own short term gain.

Posted by Paul Rosa | Report as abusive

Please permit me to make a correction – I meant to write “Those are something the governments of the – developing – world are expected to deal with through taxation or using UN and NGO development funds.”

Posted by Paul Rosa | Report as abusive

James, what you describe is an excess supply of liquid capital on international markets. Increasing investments may melt some of the excess; however, given the changing balance between net exporters and net importers, currency depreciation will probably play the main role in re-establishing a new equilibrium. Any net exporter would like to keep its currency down. It follows that any importer would like a stronger currency, but this is not quite true. For the US is a torn issue, since protecting the liquid capital value will deny melting the accumulated debt. The frenzy of US diplomacy seen over the past few months is directed to convince net exporters to appreciate their currency in order to absorb more of the excess capital, thus allowing US to depreciate more of their currency without hurting as much own investors. The argument is straightforward, if the net exporter maintains its currency low, products destined for export would not find a market, and as a result, the net exporter would end hurting itself. However, this is for the American and European consumer to decide, not for their governments. If consumption of imported goods stays at current levels, than net exporters would only have to protect themselves from the influx of speculative capital, a tendency you have captured in your analysis. Consequently, it is safe to assume that the liquid capital in excess would have to be invested in marginal riskier vehicles or suffer the loss through devaluation if parked in “safer” deposits. Therefore, the systemic risk is currency devaluation, in an environment where stocks are starting to look as overvalued already anywhere. This is why a balanced distribution of the GDP is so important in the long run for any nation, that is, to avoid severe bust and boom cycles. Your analysis, James, is on a rock solid foundation, again.

Posted by M | Report as abusive

From M – “This is why a balanced distribution of the GDP is so important in the long run for any nation, that is, to avoid severe bust and boom cycles” and “in an environment where stocks are starting to look as overvalued already anywhere”.”Balanced distribution of the GDP”? HOW?”if the net exporter maintains its currency low, products destined for export would not find a market, and as a result, the net exporter would end hurting itself.” ???It’s worked for them – the “net exporters” for years and the net exporters aren’t responsible for the debt driven consumption and the hidden “inflation” i.e. the insane speculation on domestic real estate, especially in the US – of the western “net importers”.But none of the above – even if it could somehow happen – will make the housing bubble re-inflate will it?In other words – as our population grows old and shriveled – so will the currency. But one thing is obvious – the grandchildren don’t inherit our debts. They inherit “play money’.

Posted by Paul Rosa | Report as abusive

Ultimately “net exporters” have to be absorbed by the western economies and that means in the case of China – With a stronger Yuan – they will probably buy most of the big box stores they fill already with their economical production. The Japanese were buying many US assets years ago. This has all happened before but China is so much larger than Japan or the Middle East oil kingdoms. And as part of the whole Far Eastern economy – APEC – isn’t it all unprecedented and gigantic?As much as people tend to hate big box stores in many rural and suburban areas, and even try to zone against them, it will be very unnerving to have to pay far more for the now cheap goods that fill almost every Mall and big box on the strip?Isn’t it possible that in the not too distant future – the big box stores- and entire malls – may all be out of business and be replaced by both cheap and some very upscale outlets, owned directly by the exporters? When they own your assets – aren’t they a part of your economy, part of the national GDP and don’t count as a balance of payments problem? Or can economist and accountants just jigger the figures so it doesn’t look like it is?Somehow – I know we are all – like the Nancy Wilson song – On “our” way to China. By shear force of gravity.

Posted by Paul Rosa | Report as abusive

In response to Paul Rosa:A sustained growth requires a balanced one. It means steady rising of Marshall’s equilibrium in consistent relations between the past and future values of variables in an intertemporal optimization. Consumption (and savings) in one period should grow to the next period in tight correlation with supply at a given trade balance. In order to have this kind of correlation, the GDP difference from previous year should be shared in precise proportions between consumers, producers, and government. You can call it a social pact, mostly implicit, mostly studied in Scandinavian countries and Germany. I am not sure if China is using a similar approach, although I believe they do. Recall that suppliers use labour, which strengthen the consumer side. An important role is played by savings. It is easy to show that an increase of the interest rate is not going to cause households to save more for the future. This is way in Europe the retirement is guaranteed through legislation, at about 85% of the last 5 years of employment, provided you have around two decades of work history. However, these are details; the important fact remains that when the GDP is rising, the “average Joe” should feel it in his pocket. It can be possible only through proportional taxation as a mean to transfer wealth from the top to bottom and in between. The rational is simple, everyone would be better off, since a billionaire cannot consume its billions in a lifetime, while a beggar would be able to consume and possibly reintegrate in society. Also keep in mind that a share part from GDP going to consumers follows other paths, such as schooling, health care, social protection, infrastructure etc. These expanses, while through the labour factor are accounted in consumer category in the current period, are not accounted for in the supply side, although better training, roads, health certainly contribute positively to rising the supply side.The next one, with the net exporters, is the argument used by US government to convince net exporters to let their currencies appreciate or more blatantly put, to reduce exports, and allow more imports. The argument used might have some merit. The US is printing money to resurrect the flow of money into the main street through financial institutions. One effect is that the currency devalues. That means that imports become more expansive, which in turn determines a weaker demand for imports. Now, it may be true, but not always. If the imports are inferior goods, the demand for them increases when household incomes drop. WalMart is doing better than some upscale merchandisers are, during the times of suppressed households incomes. If so, net exporters may count on steady consumption of their products on the US market, and have no incentives to react to the US argument. Keep in mind also that punitive sanctions of the US government are limited by the WTO rules.Now, WTO (remember the Uruguay round in 1987?), was a precondition for than the USSR to fall back from Eastern Europe, through the bilateral Malta agreement replacing the trilateral Yalta agreement. In theory the agreement would had allowed USSR to participate in the international market, after 70 years of embargo. However, what followed was catastrophic for the Russians, but extremely beneficial for the multinationals and institutional investors, which were able to reap highly rewarding profits from expanding international trade of goods, services, and capital transfers. From here, you can take it on your own. A US political system assertive to big business interests did nothing to force the redistribution of wealth. Moreover, they played the hand of Israel in dealing with the Arabs, feeling confident that the oil fields were protected. Nevertheless, the price of protection is supported by the American taxpayers, and is rising with the animosity of the Arab population towards unlimited support provided to Israel.

Posted by M | Report as abusive

To Paul Rosa:In order to eliminate some confusion, a net exporter is a country of which the balance trade is positive, that is, total export value is more than total import value. However, exporting firms need not be national firms, but foreign as well. As a foreign investor, I would not invest in a place from where I cannot repatriate my return, and my capital. In this respect, a lot of importing is originated by the multinational operating abroad. Therefore, when you refer to net exporters as a country, you should have a detailed picture of who in fact is the originator of trade. Making Dell computers in China does not mean that the product is Chinese. It is Dell’s, who invested in capacity and training in China, hired Chinese labour, and whose computer is “imported” in US. They pay their obligations to Chinese and US governments, and retain the profit, if any, after subtracting expanses. Everything is legal in both countries. However, Dell is benefiting, directly and indirectly, from Chinese subsidies (i.e. gratuity in education and health, subsidized energy, cheaper land, relaxed environmental laws etc.), and cheaper labour. Moreover, you cannot accuse Dell of any improperly conduct. As a firm, Dell has a duty towards shareholders to maximize profits. It is the role of both governments to ensure that Dell’s contribution to American and Chinese societies is properly and fairly appraised, and retained.Surely, what is fair for US may differ quite substantially for what is fair to China. Moreover, the dispute regarding fairness would never ends given two political parties in the US. Even in China, with only one political party, there is not a clear-cut answer. A myriad of economic and social factors are involved, and not the least one is Dell’s expectations from these arrangements. You bet that Dell would want to have a say in what concerns its way of chasing profits. However, Dell may be too small a firm to influence anything. It is not surprising than that HP, Toshiba and others, chasing same objectives, would synchronize their efforts to get a say. Now, size matters and their say would have a greater weight. Throw in the voice of investors having interests not only in computer industry but also in oil, cars, planes and whatever, account for their tight connections with the political elite as direct contributors to political campaigns, as exchangers of favours, in short, being part of the political system, and you should understand why the consumer side is neglected. This is how the macroeconomics is losing its clout in the logic of adopting social and economic policies. When you read about the short vision prevailing over the long one, think of the explanations I provided above, written hastily but honestly.

Posted by M | Report as abusive

Successive US governments bear the whole responsibility for letting investors rule the game. More regulations, no less should have been put in place to prevent multinationals moving capital abroad without compensating for the loss of investments at home. Since the national supply was aggressively split, part of the labour used in the local economy was diverted to jobs paying less, and consequently, demand, after being propped for awhile with credit, faltered.While the firms have the obligation towards owners to maximize profit, it is the obligation of the government to restrain negative impacts resulting from economic activities.One of the most important effects in the last 20 years was the continuously eroding household incomes of the so-called middle class while GDP was rising. That should have been a warning sign for the government, but sadly, it still is overlooked today. If you look at the Scandinavians and Germans, prevalent is a more balanced distribution of wealth.However, I do not think that their capitalist way is palatable for the American political elite just yet. Just in my opinion.

Posted by M | Report as abusive

I understand your patient argument. But how is any of that almost textbook recitation going to change anything?Actually you said it a few lines into our post. The US currency will become devalued. That’s no surprise. That is what we have been living with our whole lives. From a consumer’s point of view – what is the practical difference between devaluation and inflation anyway? Can one happen without the other? Perhaps the last 20 years was a time when the two seemed to be separated. But Mr. Greenspan never liked to look at what was happening to real estate prices when he measured inflation. There must be a textbook definition of assets that sees the modern house as something that just doesn’t get ‘inflated’. Wasn’t that a core problem with the current meltdown? Houses, and real estate in general, were being inflated and speculated beyond reasonable (whatever that is) limits? He seemed to forget that a large population has to be able to make sufficient income to sustain the high prices that were occurring in real estate all over the country or the “assets” become nothing but junk waiting for the scavengers and or the next wave of unsustainable business activity willing to reinvest in them Houses were the be all and end all of consumption and the stock market liked the “wealth effect” of all that speculation. Houses aren’t really assets at all in the modern economy. They are just very “big ticket items”. Northern cities in the US have seen successive waves of collapse of whole neighborhoods over the past several decades due to changing conditions in their local economies. The south went into steep decline after the civil war and southerners moldered in their elegant decay, and even worse shantytown squalor, until about the 60’s. Coop City was built in the Bronx and that killed the existing stock of apartment and tenement blocks of most of the South Bronx almost over night. Real estate is not something that forever preserves its value. It requires economic activity to keep it alive at all. The old west was full of ghost towns of formerly boomtowns.And the US isn’t actually printing money, as I understand it – it is borrowing against future tax revenues through bond issues. The government hardly needs to print money anymore in the age of electronic transfers and ubiquitous credit cards. The government is going deeper into debt as it did during World War II. It is hoping for an increase in tax revenues from a reactivated economy to pay for that debt in the future – probably with inflated (or devalued) currency.What is likely to happen is China will have to be able to convert it vast foreign exchange reserves into tangible goods like real estate and businesses here. It’s very simple – if they hold too much “paper wealth” they have to be able to convert it into something tangible before it all vanishes in the bookkeeping. We got goods for money. The goods must somehow be returned in items of equivalent value. The money is just a means to an end. Even a cave man would understand that but he might not bother with the abstraction of “money”. Economic theory isn’t that sophisticated that it can ignore the cave man. But it can make him feel so ignorant he just shuts up and doesn’t think anymore.Both Japan and the oil exporters went on buying binges here over 20 to 30 years ago when they found that they were developing large foreign exchange reserves.And no kidding jobs went abroad. What amazes me is what keeps those that remain? Service jobs – and by that I mean government salaries, teachers, doctors, insurance firms etc, as high paying as they are and frequently with COLA built-in, in spite of the weakness of the larger economy.You have a very nice sounding set of posts but don’t suggest how the US will ever be able to make industrial production return to these shores? The northern states were never able to bring them back when they moved south in the late 60’s and early 70’s. Now they are leaving the south. What we got instead were service jobs and some high tech firms. And the US won’t be able to keep that to itself forever either. We have managerial jobs that really on cheap labor elsewhere to keep them at all. But the cheap labor won’t be cheap forever.But thanks for a lesson from an economist? And while I am not a trained economist – I do understand the logic. I will have to research “Marshall’s equilibrium” and you are the first person to mention that term in dozens of articles and posts I have read. But “intertemporal optimization” sounds very like a variety of academic jargon for a process that could be explained much more simply I suspect. Couldn’t that be translated as “best performance between business cycles? In other words, little or no balance of trade deficit between trading partners?There is no “social compact’ here. There are laws and regulations that you say were written in large part by the influence of big business and big capital. Employers tend to have a lot to say in how an economy runs if it runs at all. That doesn’t come as a surprise to me either. And for that matter, there really isn’t one in China, but I’m sure the Chinese government will make sure that CCTV and the state run media never let too may people know that too obviously. “Indoctrination” and “education” seem to have little practical difference either. If there is a social compact in China, it wasn’t gained by the high-minded acquiescence of the general population, was it? But that only raises the ugly arguments about totalitarianism vs. democracy.As for sustainable economic activity: there is no such thing except for pre-modern tribal peoples perhaps, and very primitive economies. Not when economic activity requires military power to preserve it and the suppression of vast numbers of little people to work at the least possible cost for those with the greatest wealth. It seems the history of economic activity in the world has been one where indigenous societies more or less knew how to stay alive doing tasks and meeting needs that were traditional and prone to natural forces that had little or nothing to do with the more sophisticated capitalist or socialist models. They tended lived at subsistence levels. Capitalism is a very modern system – perhaps 500 years old – according to the economic historian Fernand Braudel. It is a system that harnessed and expanded labor and created vast production and trading networks. And in it’s whole long history – it has never been stable. It isn’t about stability or sustainability – it is about acquiring and creating power and amassing vast wealth. But nothing lasts forever, does it?You haven’t said anything in your posts that convinces me the big box stores aren’t going to be owned by the Chinese sooner or later.

Posted by Paul Rosa | Report as abusive

Paul Rosa,Devaluation of currency discourages imports (imports become more costly) while encourages exports (for the importing partner, imports become more affordable);Inflation means that for purchasing today a basket of representative products, more fiat money is needed than of yesterday;Effects are quite different: devaluating currency taxes producers in the importing country, while inflation taxes consumers at home.Many other different aspects can be highlighted, however I will stop here.Intertemporal optimization is used in dynamically modeling economic systems in discrete/continuous time (making use of difference equations) in such way that over a discrete infinite period, the system would preserve its equilibrium; there are many pathways for an economic system to develop in time, but some of them will inevitably lead to chaos)The Marshallian supply and demand curves mark an equilibrium point where they intersect; the Hickssian supply and demand curves are derived from the Marshallian equations through Roy’s transformation and incorporate income and substitution effects – technicalities that would not impair our debate.An interesting fact raised by Pearl is that Marshall, the promoter of free competition from his professorial desk at the London School of Economics, solved the US railway disputes around 1890 by eliminating competition between various companies engaged in a price war through the formation of a cartel, thus rising profitability AND the power of investment. Some distinguished economists, citing this and other contradicting facts between theory and real economic developments are signalling a discontent between the neoclassical economic development theory predictions and reality.Printing – whatever you call it, be it bond, it is a written contract between two entities, eager to trust each other. One is borrowing on spot a pile of fiat money (paper money) with the value inscribed on each banknote, promising to return a bigger pile of banknotes on a set date in the future.Keep in mind that with this pile of monies today one can buys, let say, groceries for a week at home or same groceries for a week abroad, using foreign currency.At the set date, the lender receives back the promised (bigger) pile of banknotes. If he can purchase groceries for more than a week, that means he has realized a profit. Should he be satisfied? That depends of what profit he could have realized borrowing the same pile to another entity (an opportunity cost if you will). In addition, he may be satisfied with the profit at home, but not abroad. That can happens in the eventuality that the bigger pile that he just received back, converted in foreign currency, would has covered less of a week of groceries.Now, the borrower has just honoured his part of the deal. However, what if the borrowed money were not enough to pay back the lender? He might have to borrow more, in order to meet his obligation at the set date. If he were a private entity, this would have been difficult. However, the state, among other options, has one that nobody else has: printing money. This operation has limits too. Too much fiat money in the system and the value of each banknote drops (fewer groceries). Too fewer fiat money in the system, and the lender cannot be paid back as promised (government in default).Your questioning of the quantity of money at a given time in the market is legitimate. Not all transactions require paper money. However, the central bank has the statistical support to regulate the desired quantity of paper money needed in the system.Printing paper money is a process happening in good and bad times. Increased number of transactions may require more liquidity or a natural process of replacing thorn paper money is a usual occurrence.A particular interest is given when the national debt is very high relative to GDP. From a static perspective, that does not tell you much. From a dynamic perspective, that is another story, and this is why dynamic modeling is in demand. Since processing power has increased so much, economists, mathematicians, statisticians, econometricians all concur in analysing and predicting the optimal pathway possible given a set of aggregated parameters. Do not get it wrong, there is plenty of room for mistakes despite such formidable processing power and smart specialists. There is still no match for the complexity of the economy. It is still a work in progress.However, a high national debt can be reduced essentially in two ways: rising revenues or lowering expenditures. In terms of methods, they really are unlimited.One of them is by printing money. The government capture the so called signiorage tax from the taxpayers (in order to purchase the weekly basket of groceries you forfeit more of your income and so you pay higher taxes while the seller pays more taxes for additional revenues), and is taxing more the producers abroad in the countries with which has trade relations. There are several effects: first is that the value of the total debt depreciates, more revenue is collected from internal transactions, and more revenue from export activities are to be gained. However, it is losing some revenue from fewer imports, although keep in mind that whiles the quantity of imports may decrease, their price in exchange will soar, and so the excise taxes.Paul Rosa, there is a whole lot more to say, and I tried to avoid as much as I can technicalities, data, kind of details that usually accompany such dissertations. Some of the logic is here so you can build on it.With regard to your question if the Chinese would invest in Americans malls, I very much doubt it. More likely that companies amassed with highly technical patents and technologies are more of a target for them (think of Lenovo). That said, I cannot exclude future investments in commercial real estate, but again, I would not count on this, definitely, not on a widespread scale.What puzzles me is the fact that you seem to avoid discussing the essence of what I intended to be the central dissent in this “great debate” section, a more balanced distribution of wealth in society. I emphasised, maybe not enough that I am referring to a capitalist society, not to an exoteric type. Examples of Scandinavian nations and Germany and Switzerland would have awakened up at least a bit of interest.Although you have asked how it is possible, the answer was right there, by discouraging the capital leaving the US. The same way a nation can raise barriers to incoming capital, a nation can deter capital for leaving. The theory of trade is not immune to criticism, however it warns of caveats, just like the one we just experimented. Economists are well to aware, but they kept their mouths shut. Why? Well, maybe next time will dig more into it.

Posted by M | Report as abusive

The more critical question is: when will the asset bubble in emerging markets burst? Will the world go into double-dip recession if the bubble burst?The moment the Greenback appreciates, and shows signs of sustained appreciation, the money will flow out of emerging markets, causing havoc for many small countries.

Posted by scheng1 | Report as abusive