The well-known Noble prize winning economist, Paul Krugman, seems to be gaining more and more attention as a New York Times columnist than he had
as a regular economist. Maybe in these times of unbridled admiration for fame and
celebrities, Krugman should consider joining a reality show, if he wants
to influence the world outside the U.S. and possibly outside our universe.
Anyway, his latest column, This Age of Bubbles,
questions why we've experienced so many economic bubbles since the late
70s. After the housing bubble in the U.S. and Western-Europe from a few
years ago, before that the dot-com bubble, then the Asian bubble of the
1990s, and the real estate bubble (in the U.S.) of the 1980s, it seems
now the BRICs with Brazil, India, and other emerging markets are hitting
the proverbial economic walls.
Krugman:
"What’s going on? It’s a variant on the same old story: investors loved
these economies not wisely but too well, and have now turned on the
objects of their former affection. A couple years back, Western
investors — discouraged by low returns both in the United States and in
the noncrisis nations of Europe — began pouring large sums into emerging
markets. Now they’ve reversed course. As a result, India’s rupee and
Brazil’s real
are plunging, along with Indonesia’s rupiah, the South African rand, the Turkish lira, and more."
After
referring to the Federal Reserves policy of lowering interest rates and
financial deregulation in the U.S. and around the world, Krugman
concludes:
