Remember Back In July 1997, It Was “The Asian Crisis” Then

Posted By on December 7, 2010

The Stated Truth  Op-Ed

Tuesday, December 7, 2010

Let’s Go Back In Time……To 1997

In July 1997, the Asian crisis evolved into fears of a worldwide economic meltdown due to financial contagion. On December 1st 1997 South Korea had to be saved with a $55 billion bailout.  It was then the largest bailout in the history of the world, but would only amount to a small $75 billion in today’s money…..By contrast, Ireland will cost more then $100 billion before breaking open another piggy bank!  And we haven’t yet got to Portugal or Spain!  These are huge amounts of money that in retrospect may be thrown at problems that are unsolvable.  In the European situation, the ECB says 440 billion Euros will be enough, but we all know it will likely require more, a trillion Euros isn’t out of the question when it’s said and done.  Portugal, Spain and let’s throw in Italy just for good measure… will all have their hands out. 

Maybe the worst outcome would be if the Euro dissolves itself.  Should that happen, then all HELL will brake loose…..Gold anybody?   On second thought, maybe that’s the best outcome! 

The point of all of this is that just a mere 12 years ago, $55 billion was the largest save the world had ever seen……..now 12 years later, we hear talk most often about $500+ billions to trillions.  Things have truly turned into “monopoly” money……and to think, it only took a mere 12 years!

Chronology of the Asian Financial Crisis 1997

  • Early May (1997) – Japan hints that it might raise interest rates to defend the yen. The threat never materializes, but it shifts the perceptions of global investors who begin to sell Southeast Asian currencies and sets off a tumble both in currencies and local stock markets.
  • July 2 – After using $33 billion in foreign exchange, Thailand announces a managed float of the baht. The Philippines intervenes to defend its peso.
  • July 18 – IMF approves an extension of credit to the Philippines of $1.1 billion.
  • July 24 – Asian currencies fall dramatically. Malaysian Prime Minister Mahathir attacks “rogue speculators” and later points to financier George Soros.
  • Aug. 13-14 – The Indonesian rupiah comes under severe pressure. Indonesia abolishes its system of managing its exchange rate through the use of a band.
  • Aug. 20 – IMF announces $17.2 billion support package for Thailand with $3.9 billion from the IMF.
  • Aug. 28 – Asian stock markets plunge. Manila is down 9.3%, Jakarta 4.5%.
  • Sep. 4 – The peso, Malaysian ringgit, and rupiah continue to fall.
  • Sep. 20 – Mahathir tells delegates to the IMF/World Bank annual conference in Hong Kong that currency trading is immoral and should be stopped.
  • Sep. 21 – George Soros says, “Dr Mahathir is a menace to his own country.”
  • Oct. 8 – Rupiah hits a low; Indonesia says it will seek IMF assistance.
  • Oct. 14 – Thailand announces a package to strengthen its financial sector.
  • Oct. 20-23 – The Hong Kong dollar comes under speculative attack; Hong Kong aggressively defends its currency. The Hong Kong stock market drops, while Wall Street and other stock markets also take severe hits.
  • Oct. 28+ – The value of the Korean won drops as investors sell Korean stocks.
  • Nov. 5 – The IMF announces a stabilization package of about $40 billion for Indonesia. The United States pledges a standby credit of $3 billion.
  • Nov. 3-24 – Japanese brokerage firm (Sanyo Securities), largest securities firm (Yamaichi Securities), and 10* largest bank (Hokkaido Takushoku) collapse.
  • Nov. 21 – South Korea announces that it will seek IMF support.
  • Nov 25 – At the APEC Summit, leaders of the 18 Asia Pacific economies endorse a framework to cope with financial crises.
  • Dec 5 – Malaysia imposes tough reforms to reduce its balance of payments deficit.
  • Dec 3 – Korea and IMF agree on $57 billion support package.
  • Dec 18 – Koreans elect opposition leader Kim, Dae-jung as new President.
  • Dec 25 – IMF and others provide $10 billion in loans to South Korea.
  • Jan 6 – Indonesia unveils new budget that does not appear to meet IMF austerity conditions. Value of rupiah drops.
  • Jan 8 – IMF and S. Korea agree to a 90-day rollover of short-term debt.
  • Jan 12 – Peregrine Investments Holdings of Hong Kong collapses. Japan discloses that its banks carry about $580 billion in bad or questionable loans.
  • Jan 15 – IMF and Indonesia sign an agreement strengthening economic reforms.
  • Jan 29 – South Korea and 13 international banks agree to convert $24 billion in short-term debt, due in March 1998, into government-backed loans.
  • Jan 31 – South Korea orders 10 of 14 ailing merchant banks to close.
  • Feb 2- The sense of crisis in Asia ebbs. Stock markets continue recovery.

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