///But if they can’t find anyone to lend to them at any price, that’s a sign of more dire straits, because unlike most countries that can print money in an emergency, they have no lender of last resort.///

In a mad mad world the sane finds it hard to prevail. Merkel tries to be sane. Spain like Greece/Italy (tourists havens) not competitive but they joined EU and Euro even if they don’t meet ‘Maastricht Criteria’! How? European Central Bank (ECB) is not US Federal Reserve. The treaties governing ECB are not same as Federal Reserve that advances US Capitalist interest. ECB is supposedly independent, committed to combat inflation. Though can “print money” (which is just accounting entries of reserves versus treasury bonds/notes). ECB is limited lender of last resort. If it purchases more Spanish bonds to bail out it injects liquidity into the zone causing inflation if supply of goods/services cannot match excess liquidity and national interest of richer & more competitive country like Germany will hurt. Why bail out the lazy buggers downsouth? Esp when after first round of bailout via bond purchase – crossing the policy rubicon of ECB – has not convinced markets and give ECB’s balance sheet a hit! But whatever you can’t shield from inflationary if other countries with reserve currencies like US Japan keep selfishly printing to drive up prices! If Spain caves, France next?

I don’t understand much of this world macroeconomic turmoil – leading to Eurozone debt and Greece, Italy Spain- but sense that maybe a lot is traceable ultimately to Uncle Sam’s hegemony/greed and the world financial system that it as massaged, exploited and brought to present stage. It dominates, holds in hostage, bullshits and impoverishes many in rest of the world by the vaunted Greenback that it prints and floods the world to finance its deficit and spending. First it boasted of Greenback backed by Fort Knox’s gold. Then in 1913 the Federal Reserve started to issue paper notes that were only 40% backed by gold while claiming they were fully convertible. When emerging victor of World War II and architect of new world order, it started UN, IMF and imposed its will on rest by Bretton Woods that requires each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the IMF to bridge temporary imbalances of payments. In 1971, the US unilaterally terminated convertibility of the dollar to gold and Greenback has been backed by nothing but the promise of US govt. Nothing but Congress’s ceiling now stops Federal reserves from just printing to finance its debt and spending. Ex Fed Chairman Alan Greenspan has the nerve to say “The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default”. They are abusing their Reserve Currency (RC) to the hilt.

Selfish maybe, don’t know about ‘stupidity’ part. China in May this year has taken the lead by example to reduce its over a trillion US Treasury securities replacing with gold. (China itself has surpassed South Africa in producing gold). That was way before Aug S&P’s downgrade of US triple A debt rating. It isn’t because of stupidity China has accumulated heaps of such papers. Firstly it’s an international monetary system that US, as victor of 2nd world war, could impose its reserve currency status (CRS) on the world at large – and not just ‘stupid’ China –through sheer industrial and military power. After de-linking Greenback from Gold in 1971 the US went all out to control “black gold” – oil to preserve that CRS status by pressuring all to accept billing of Oil in US$, stationing Marines in fundamentalist Saudi Arabia to support corrupt House of Saud, control Panama & Suez canals through which oil tankers traverse, evicted Afghanistan’s Taliban to protect oil pipeline, even put down Saddam under pretext of non existent WMD if he’s perceived threat by CIA to Saudi or Kuwait.

(Continuing) Of course before China could make Yuan the Reserve Currency it has first to make it convertible for trading on international markets, which it intends by 2015. This is to challenge US Federal Reserve’s scam of creating unlimited money out of debt. To add insult to injury not even by the printing press printing actual greenback but by simple expedience of electronic account entries, debit & credit of reserves swapping for treasuries ! Look at composition of Federal Reserve and who’s in it and the capitalist interests it represents and you’d know the implications of how the Federal reserve could engineer for Americans to consume, nay even force them to consume beyond their means to serve US capitalistic interests & corporate profits.

Dunno the reasons, it also depends on case to case which East Asian Country one is talking there being considerable difference between China, Japan, Taiwan Koreas. Can only speculate what is ordinarily assumed aboutlow wages and minimal labor rights -partly a political tradition of authoritarianism without priority to rights recognition, industry policy geared to lowering costs to gain competitiveness it being assumed labor is not exactly qualitative in technological value chain to justify higher wages, protect infant industries which include industries owned by cronies, and a general fear by elites that organised labor rights, if not restricted, could lead to strikes and political activities of unions. In China case it is ironic that founded on Marxist principles of workers rights independent trade unions are forbidden & workers rampantly exploited. However China has implemented in 2008 some new labor laws requiring employers to pay overtime, provide insurance and give laid off workers one month of severance pay for every year worked which are estimated to increase 15-20% operational cost of what you would regard sweat factories.