>Re Louis's quote from the WP: "... the dangers to capitalism shouldn't
>be
>exaggerated. So far, most of the government interference, including
>Malaysia's, has been limited to the markets for money."
>
>The beauty part of this limited intervention is its potential to cause a
>TOTAL change in social psychology. Now that the high priests of
>"respectable" economics have ruled it's legitimate for governments to
>meddle in the marketplace to save financial interests, it will be well
>nigh impossible for them to maintain a vigorous argument against
>government action to promote social welfare more directly.
There are a lot of mutual funds, derivatives contracts, and offshore deposits denominated in Malaysian ringgit that are now effectively , what?, inoperative? If a few more countries follow Malaysia's lead, not only will a lot of financial instruments be directly disrupted, the whole set of assumptions that have governed the financial world for the last 10-20 years - of frictionless capital flows and currency convertibility - will have to be rethought.
Doug