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Sam Vaknin's Psychology, Philosophy, Economics and Foreign Affairs Web Sites



The recent upheavals in the world financial markets were quelled by the immediate intervention of both international financial institutions such as the IMF and of domestic ones in the developed countries, such as the Federal Reserve in the USA. The danger seems to have passed, though recent tremors in South Korea, Brazil and Taiwan do not augur well. We may face yet another crisis of the same or a larger magnitude momentarily.



What are the lessons that we can derive from the last crisis to avoid the next?



The first lesson, it would seem, is that short term and long term capital flows are two disparate phenomena with very little in common. The former is speculative and technical in nature and has very little to do with fundamental realities. The latter is investment oriented and committed to the increasing of the......

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Approximate Pages: 4 (250 words per double-spaced page)

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