Healthy Money Healthy Planet - library.uniteddiversity.coop

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For over a decade, Japan struggled unsuccessfully with its banks’ bad
debts after a huge property boom collapsed in 1990 and its share market
collapsed. Japan’s experiment to stimulate its economy by the orthodox method
of reducing interest rates has failed – a fact that has since been conceded by the
Governor of the Bank of Japan. At the time of writing, Japan spends half of its
government income servicing debt and is in its fifth year of damaging deflation.
Thailand’s economy similarly met a dreadful fate in 1997. A credit bubble
of terrifying proportions burst, and the country’s baht currency, which had
been pegged to the US dollar for 10 years, was depegged. The baht
subsequently lost more than 50 per cent of its value against the dollar and the
Thai stock market fell by approximately 95 per cent from its all­time high. Even
today, says Asian financial analyst Richard Duncan, ‘industrial capacity
utilization is less than 55%, and the vacancy rate in the property market in
Bangkok exceeds 30%’. 1
Why should people worry? Because the collapse of any economy is a
profoundly disturbing thought, and even more so if it involves such powerful
countries as the US. Richard Duncan, who in 1993 was one of the first to warn
of the impending crash in Thailand, says: ‘A repetition of the pattern
established in Japan and replayed in South East Asia of stock market crashes,
corporate bankruptcies, bank failures and deflation is now under way in the
US.’ 2 And who should worry? Investors, owners of real estate, workers, parents,
business owners and anyone who holds a bank account should be concerned,
because whether they are ready or not, they will be affected by economic
collapse. If citizens can’t withdraw money from their bank accounts to buy food