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Mahathir VS. Soros Financial Defensive VS Financial Offensive
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Mahathir VS. Soros Financial Defensive VS Financial Offensive
Frank morning, July 30 3014 in Waterloo, On. Ca.
The Real Economy, according to the Economy on Wikipedia, is the part of the economy that is concerned with actually producing goods and services, as ostensibly contrasted with the paper economy, or the financial side of the economy, which is concerned with buying and selling on the financial markets.
Intuitively say, that paper economy or financial economy is to make money by money.
The real economy that U.S. Federal Reserve Board (FED) frequently used is the part of removal of the markets of financial, real estate and the core energy consumption.
July 27, 2014, in an interview with Bob Schieffer on CBS’s Face the Nation, the former Secretary of State Madeleine Albright said: "To put it mildly, the world is a mess". She clearly emphasized that “We don’t want to be the world’s policeman.”
Essentially say, the United States is a great country, but the state apparatus being controlled by some irrational people and being used to show personal ugly muscles through fanning evil wind with lighting evil fire everywhere by the sacred name of upholding justice for the world.
Here, I do not want to comment about that, but, I want to say is that, today, the vast majority of social unrest is associated with the difficulties of life, which are the combustible agents for lighting the evil fire. The cause of difficulties in life is not the shortage of the social wealth, but the unfair distribution.
The reason for so called unfair distribution, or social inequity, or social polarization, in large part, comes from the financial economy plundering on the real economy.
People will never forget the 1997 Asian financial crisis that gripped much of East Asia and raised fears of a worldwide economic meltdown due to financial contagion.
August 1997, in the article Currency "sabotage" should be an international crime, the writer Martin Khorsaid that:
“Dr. Mahathir said he was disappointed that while certain people championed human rights, the same people allowed those like Soros to undermine the economies of not just countries but regions.”
"'We have worked 30 to 40 years to develop our countries to this level, but along comes a man with a few billion dollars and who in a period of just two weeks, has undone most of the work we have done. And as a result, the people of our countries suffer.’"
"The Prime Minister said there was much talk about human rights and the protection of people, but the public ‘must be protected from people like Soros who has so much money and so much power and is totally thoughtless because he is not only hurting the people of Myanmar but the poor people in Indonesia, Malaysia, the Philippines and Thailand. These people suffer because the cost of everything has gone up.’"
In Aug. 1998, it has been replayed in Hong Kong, but defeated by the strong support of China. It was a new atypical war without the smoke of gunpowder, but, the economic strength of two countries.
Obviously, that was a private fund purposefully to destroy a country and even a region – a group countries’ economies, if there was no the acquiescence of the power of the State Apparatus, which individual had such a bold guts.
Many lessons lesson us that the financial instruments developed into today, have been powerful enough to achieve a effect as that of a strong military power can not achieved.
As my view, that 1997 Asian financial crisis was a preview of the new war of a barbaric country has thoughtfully orchestrated.
This is the sadness of human civilization.
In today's deteriorating international environment, for any country or any individual, the survival is facing challenges. Regardless of the ordinary Canadians, or the politicians with decision-making power, should be join the hands to make every efforts to build Canada as a place where the decent people can live a decent life through social wealth creation by their talent and hard work, rather than the fairyland for the speculative predators.
--- Frank morning, July 30 3014 in Waterloo, On. Ca.Currency "sabotage" should be an international crime
by Martin Khor http://www.twnside.org.sg/title/sab-cn.htm
PENANG, MALAYSIA: The Malaysian Prime Minister, Dr Mahathir Mohamad, has said the international community should make sabotaging of currencies by financial speculators a crime.
"Otherwise, the currencies of developing countries will continue to be sabotaged," he told the media in Alor Star, a Northern Malaysian town, on 27 July 1997.
Dr Mahathir said he was disappointed with countries that preach the open economy to developing countries but practise double standards when free market manipulation hurts them.
Citing an example, the Prime Minister said when three or four people manipulated the trading of junk bonds in the US, causing others to incur huge losses, the authorities arrested and jailed them. "But when this happens to us, they define it as an open market situation."
Dr Mahathir had been asked by reporters to comment on remarks made by the US State Department spokesman Nicholas Burns, who was in Kuala Lumpur for the ASEAN Regional Forum meeting.
On 26 July, Burns had told the press the US did not think there was a conspiracy behind the currency destabilisation affecting Southeast Asian countries. The speculation was the result of economic forces at work and they could be corrected by sound economic policies.
Speaking to the press on 26 July, Dr Mahathir had named George Soros (an American of Hungarian nationality) as the man he had blamed for destabilising Southeast Asian currencies.
"He (Soros) is known as a man who has tried to use his financial clout in the US to block Myanmar's admission into ASEAN," Mahathir had said, in responding to a denial by the Soros Fund Management on 24 July, that it had intervened in the Asian currency markets to punish certain governments that support Myanmar's admission into ASEAN.
Soros, in a statement from New York, admitted he wanted Malaysia and Thailand to oppose Myanmar's admission to ASEAN and said he "continued to consider the acceptance of a totalitarian and repressive regime a threat to the region's prosperity and stability. However, I do not believe that the cause of freedom in Myanmar would be advanced by linking it to currency speculation."
Commenting on Dr Mahathir's allegation that Soros was behind the speculation, State Department spokesman Burns said he could not speak for Soros, but described Soros as a "man of courage" whom "we respect a lot and who has done a lot of good in the world."
Currency sabotage should be a crime
Speaking on 27 July to the media, Dr Mahathir said all countries would be exposed to the risk of currency sabotage as long as the international community did not regard it as a crime. He added that unless the international community acted against such a practice, the currencies of developing countries would continue to be sabotaged.
"This phenomenon will be repeated and it is for this reason that we must regard it as a crime."
Asked what action could be taken against people like Soros, Mahathir said that Malaysia could not do anything because it was not a superpower. "If we are a superpower we can use our laws outside our country, send out soldiers to arrest a person and bring him back to trial," he said.
Meanwhile, the Thai Foreign Minister, Prachuab Chaiyasarn, said ASEAN had to design a formula that would give the region immunity against currency speculators out to destabilise the economies of member countries.
"I call it a financial virus. We have to acquire immunity against this virus which has a tendency to relapse," he said, adding he was very supportive of the Malaysian Prime Minister for raising the issue at the ASEAN ministerial meeting.
Earlier, in the third week of July, leaders of ASEAN attacked financial speculators for being responsible for the recent fall in the value of their currencies and pledged to work together to combat the threat.
ASEAN's joint communique
On 25 July, at the end of the ASEAN ministerial meeting in Kuala Lumpur, the Foreign Ministers issued a joint communique expressing concern over "well-coordinated" efforts to destabilise ASEAN currencies for "self-serving purposes, thus threatening the stability of all ASEAN countries."
The communique called for further intensification of cooperation to safeguard and promote ASEAN's interests.
Malaysian Foreign Minister Abdullah Ahmad Badawi, who chaired the meeting, told the press that the finance ministers and Central Bank governors from member countries would look into ways to see "what we can do collectively."
This was echoed by the Thai Foreign Minister, Prachuab Chaiyasarn, who said the finance ministers would now have to get down to the formula or mechanism to safeguard ASEAN from currency manipulations.
Earlier, speaking at the meeting (which he had inaugurated), Dr Mahathir Mohamad blamed currency speculators for causing the fall of currencies in ASEAN countries, and criticised the "well-planned effort to undermine the economies of all the ASEAN countries by destabilising their currencies."
The Prime Minister said ASEAN's economic fundamentals were good, yet "anyone with a few billion dollars can destroy all the progress that we have made."
Questioning the benefits of free trade
Noting that developing countries are told to open up for totally free trade and commerce, Dr Mahathir commented: "Free for whom? For rogue speculators? For anarchists wanting to destroy weak countries in their crusade for open societies, to force us to submit to the dictatorship of international manipulators?"
He questioned the benefits to developing countries of free trade advocated by the industrial countries and warned that liberalisation may only facilitate the Northern corporations to penetrate into the developing world.
"The world now talks glibly of a borderless world, of the Information Age, of open markets and societies. ASEAN, as a group of developing countries, will need to know how all these new concepts about international commerce and politics will affect us," he said.
"It is wonderful to know that all the huge markets of the developed countries will be open to us in exchange for our opening up of our tiny markets. But can we really gain access to these markets? Or will the removal of borders cause a flow in one direction only?"
Dr Mahathir added: "We want to embrace borderlessness but we still need to protect ourselves from self-serving rogues and international brigandage."
"Already we are seeing giant companies swallowing up chunks of the business in the developing world. They monopolise the services sector through their huge shipping, airlines, insurance companies and banks. Also, the media, print and electronic, are now controlled by them throughout the world."
"Already they have formed powerful trade blocs. And eight of the most powerful nations (a reference to the G-7 industrial nations plus Russia) have decided that they, and they alone, should determine the fate of every country. When they agree on anything, as for example, the revaluation of the yen, we have to pay the price. And when they quarrel we will be trampled under."
"Alone, none of the Southeast Asian countries will be able to protect itself. But nine Asean countries with half a billion people may be able to do something to help themselves."
Dr Mahathir said he was disappointed that while certain people championed human rights, the same people allowed those like Soros to undermine the economies of not just countries but regions.
"We have worked 30 to 40 years to develop our countries to this level, but along comes a man with a few billion dollars and who in a period of just two weeks, has undone most of the work we have done. And as a result, the people of our countries suffer."
The Prime Minister said there was much talk about human rights and the protection of people, but the public "must be protected from people like Soros who has so much money and so much power and is totally thoughtless because he is not only hurting the people of Myanmar but the poor people in Indonesia, Malaysia, the Philippines and Thailand. These people suffer because the cost of everything has gone up."
On whether he considered Soros a criminal, Dr Mahathir said: "Well, as much as people who produce and distribute drugs are criminals because they destroy nations, people who undermine the economies of poor countries are also."
"If you want to devalue the pound or the US dollar, you can go ahead and do it. But if you do this against poor countries and you think you are doing a great job, a charitable job, I think you must be somewhat distorted in your idea about things." (TWE No. 167, 16-31 August 1997)
Martin Khor is the director of Third World Network.
Soros Calls Mahathir A 'Menace' To Malaysia
The international financier George Soros on Sunday branded Prime Minister Mahathir bin Mohamad of Malaysia "a menace to his own country" and "a loose cannon" who should not be taken seriously.
Mr. Soros was responding to repeated accusations by Mr. Mahathir that he and other speculators were responsible for Southeast Asia's recent currency and financial turmoil.
The blistering attack by Mr. Soros was made 24 hours after Mr. Mahathir told a World Bank gathering here that currency trading should be made illegal.
"I know I am taking a big risk to suggest it, but I am saying that currency trading is unnecessary, unproductive and immoral," Mr. Mahathir said Saturday night. "It should be stopped. It should be made illegal. We don't need currency trading. We need to buy money only when we want to finance real trade."
On Sunday, Mr. Soros said: "Dr. Mahathir suggested banning currency trading. This is such an inappropriate idea that it doesn't deserve serious consideration. Interfering with the convertibility of capital at a moment like this is a recipe for disaster. Dr. Mahathir is a menace to his own country."
The U.S. Treasury secretary, Robert Rubin, while saying he had not read Mr. Mahathir's speech, said at a news conference here Saturday that "currency trading is an inherent and very important function in a modern and global economy, and it is integral to global trade."
When Thailand's currency crisis caused the Malaysian ringgit and other regional currencies to crash last month, the Malaysian prime minister blamed hedge-fund investors such as Mr. Soros, whom he called "a moron."
In remarks that some bankers fear could trigger another sell-off in Malaysia's currency and equity markets, Mr. Mahathir said Saturday that "quite a few people who are in the media and in control of the big money seem to want to see these Southeast Asian countries and in particular Malaysia stop trying to catch up with their superiors and to know their place."
During his speech before an audience of international investors, bankers and government officials, the Malaysian leader also blamed international speculators for "the attempts to push us back by a decade through forced devaluation of our currency, through the rape of our share market." He said, however, that "we in Southeast Asia and in Asia are still keen to receive investments from Europe and America."
Mr. Mahathir said there had been "a lot of talk about our scaring away foreign, meaning Western, capital." But he stressed that "we of Southeast Asia at least are now very scared about foreign capital."
"We thought they were helping us to prosper. We conducted road shows to encourage them to invest in our share and financial markets. We will continue to do so," he said, adding: "We still believe there are sincere investors out there. But there are also quite a few rogues who can cause an avalanche forcing others to run for cover."
In the presence of the World Bank president, James Wolfensohn, who described him as a long-time friend, Mr. Soros said Sunday that he had been subjected to "all kinds of false and vile accusations" by Mr. Mahathir. He contended that the Malaysian leader was using him "as a scapegoat to cover up his own failure."
The vitriolic exchange between Mr. Mahathir and Mr. Soros was a rare occurrence against the normally sedate backdrop of the World Bank and International Monetary Fund's annual meetings. By Sunday, the Soros-Mahathir dispute had riveted the attention of the thousands of bankers and government delegates.
Mr. Soros said at a news conference Sunday that Mr. Mahathir was "playing to a domestic audience" and added, "I don't think he should be taken seriously because this is all grandstanding. The local media are controlled by Dr. Mahathir, and that is what enables him to grandstand the way he does."
If the Malaysian leader's threat to ban currency trading were taken seriously, Mr. Soros said, "it would have a devastating effect on markets." Mr. Soros said that he had not sold any of Malaysia's currency until at least two months before the crisis, and had been actually buying ringgit. He did not define the starting date of the crisis.
Asked why he thought he had been singled out by Mr. Mahathir, he cited "ideological differences" between his own vision of an open society and Mr. Mahathir's notion of Asian values.
In his speech, Mr. Soros said that the emphasis on Asian values had "served as a convenient pretext for resisting democratic aspirations." The Hungarian-born Mr. Soros, who made his fortune through stock and currency trading, has donated heavily to organizations promoting free enterprise.
Paul Volcker, a former chairman of the U.S. Federal Reserve Board who was attending the meetings here, cautioned against taking Mr. Mahathir's remarks too seriously. "He is venting his frustration," Mr. Volcker said.
While bankers and officials were speculating Sunday on the potential impact of Mr. Mahathir's remarks when trading resumes in Malaysia on Monday, the prime minister's top deputy, Finance Minister Anwar Ibrahim, appeared to be engaged in damage control.
"There is absolutely no change in the practice of currency trading at present," he said Sunday. The Malaysian finance minister, who earlier this month sought to woo back foreign investors frightened by Mr. Mahathir's rhetoric, claimed that the prime minister had been speaking only in the context of World Trade Organization negotiations for rules to liberalize financial services markets.
Mr. Anwar said Malaysia would "like to proceed" with the WTO talks "only on condition there are effective guidelines, mechanisms to protect emerging economies from unscrupulous speculators." But he said Kuala Lumpur remained "committed to further measures to liberalize" its economy.
Mr. Anwar's clarification marked the second time in seven days that Malaysia had followed an attack on foreign speculators with attempts to soothe foreign investors. A week ago, Mr. Mahathir sought to reassure foreign fund managers that they were still welcome in Malaysia.
Mr. Soros also conceded that he considered "the laissez-faire idea" that markets should be left to their own devices a dangerous notion because "the instability of financial markets can cause serious economic and social dislocations."
Mr. Soros contended that "Malaysia has a problem, which is the excessive credit expansion that has occurred." He said that Malaysian credit had grown by an average of 30 percent a year over the past three years and was now approaching 160 percent of gross domestic product, and that finance company loans equaled 57 percent of GDP.
