Is another East Asian Financial Crisis brewing?

Thursday 13 June 2013

Above is an interesting short video from the Financial Times’ James Mackintosh on the huge equities sell-off that has punished emerging markets (East Asia in particular).

According to Mackintosh, the sell-off and capital flight has been caused primarily by rising real interest rates in the US, as well as the rising US Dollar and falling Japanese Yen. Just as it did in the build-up to the 1996 East Asian Financial Crisis, hot money is exiting emerging markets to bet on Dollar assets, meanwhile Japan is becoming a stronger export competitor on the back of its devalued currency.

unconventionaleconomist@hotmail.com

www.twitter.com/leithvo

About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.