>Brad De Long wrote:
>
>>As Stanley Fischer never tires of saying, the primary point of the
>>peso support package was to help *Mexico.*
>
Hmmm well, perhaps. The way that you guys tried to sell it to the rest of the world was that "We must help Mexico, because they have done everything they were told to". Mexico was used as a poster-child for "reform", which could not be allowed to fail lest everyone else give up on the Washington consensus. Nobody really felt comfortable with this (I seem to remember Germany and Japan? abstaining at the IMF), but went along with it to be good mates.
There *were* a number of US government statements at the beginning of the crisis that it had "serious implications for world financial stability" (the rumour at the time was that JP Morgan had been caught holding a massive position in tesobonos when the bomb went off", but the Yanks dropped this claim when it became clear that nobody was taking it very seriously.
I'd say that the primary point of the peso support package was to avoid finding out what might happen in the event of a bond default.
dd
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