....And helped sow the seeds of the current crisis, so says former (Labour) Australian Prime Minister. (From SMH via naked Capitalism)
"Keating went on to argue that, by frightening the Chinese into building their vast $US2 trillion foreign reserves, Geithner was responsible for the build-up of tremendous imbalance in the world financial system. This imbalance, in turn, according to Keating, contributed to the global financial crisis which has since devastated the world economy...."
"That is the fundamental cause of the problem - the imbalance is the fundamental cause."
This looks to me like domino number Two, One being A credit Bubble caused by central Banks failing to understanding capital flows, thus lowering interest rates.
Of course if this is so, higher interest rates would have sucked up more cash from the Asian wall of money, so Domino one is weakness in the Fiat Currency System exposed by globalization.
And what are we doing? * using protectionist measures on capital flows to protect the Fiat Currency system instead of changing and reforming it.
As ive stated before, this is the end of an era, the Dollar Standard, or the beginning of the end, the Politicos wont understand until there spending is shown not to work and we bounce along in stagflation for sometime, or worse.
* at least that is the plan if Gorgon can set up his global regulator.