Friday, October 10, 2008
Pakistan now in the deep end
Facing imminent bankruptcy, terror-stricken Pakistan has dispatched its top finance officials to Washington, London and other friendly world capitals seeking a lifeline of over USD 10 billion in emergency aid.This is a tough time for most countries. And at this time, the countries that must help should be the middle east, Japan, China and India - not US/UK. Our dollar reserves are going to be worthless if we don't help out NOW.The mission to secure a six billion pound (USD 10.18 billion) bailout package is led by Shaukat Tareen, Pakistan prime minister's finance adviser and Shamshad Akhtar, the governor of Pakistan's central bank, Daily Telegraph reported.
I might deride Paulson and co, but they at least have a response. We are twiddling thumbs as our economy just about dies, holding on to currency reserves like hell. Folks, the dollar is going out of fashion. We have to let it go. We have to open our equity, gilt and bond markets to the world - to hell with "FII" registration, to hell with upper limits on bond holdings and to hell with the massive regulation we have. Yes, we were safe for our regulation, but this is the time to take the gloves off and actively participate in the world markets; and to let the world participate in ours.
Together the Japan/China/India/ME combine can buy whatever they want with the dollars they have. And dollars are in demand. So use it, buy them, get the currency off the books, and get Yen/Renminbi/Rupee/Dinar assurances in return. Yeah, need convertibility, but what better time than now for that.
We might actually want to help Pakistan too - it is important to have our neighbours financially solvent. Otherwise, people start to get ideas.
Labels: Crisis2008
2 Comments:
USSA (not a typo) has so much power because of having its currency as the reserve currency of the world. Who else can print 1T+ and still be not in a deep s..t
Dump the USD and move on.
Even a simple announcement from US, China, ME about moving away from USD will make USD worthless.
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