Sunday, April 25, 2010

EUROPE IN RECESSION


As posted by Dr. Mahathir Mohamad at Che Det on April 23, 2010 2:20 PM

1. The recession is not yet over in the United Kingdom and the rest of Europe or in the United States. The British pound has devalued much against the Malaysian Ringgit and the Euro has come under strong attacks by the currency traders.

2. Not only are the businesses and banks being bailed out but whole countries (Greece and probably Spain) are being bailed out by the European Union. There seems to be no end to bailing out. They have completely forgotten what they told us in 1997-98.

3. The workers unions are still going on strike and the executives of failed banks and businesses are still demanding to be paid big bonuses. The public screams but there is nothing they can do about it as their money is used to bail out failed companies and banks.

4. It looks like the financial crisis will not be over any time soon.

5. We may feel like applauding. What they did to us in 1997-98 is now hitting them back hard. But unfortunately both America and Europe are big markets for us. If they go down they will drag us down with them.

6. What is certain is that both these continents will not regain their past prosperity. They will recover but not fully. They will be poorer than before the crisis. This is because their former wealth was acquired through abuses of their monetary, financial and banking systems. Since they cannot abuse these systems as freely as before and have to return to doing real business under Government enforced rules and laws they will not be making the big millions they used to i.e. through sub-prime loans, hedge funds, currency trading, leveraging, credit cards etc.

7. The real business of producing and sellling goods and trading will not yield the big money that the financial markets yielded for them. Besides they have lost most of their real industries and they cannot compete with the eastern countries.

8. It will take time for them to accept the new reality i.e. that they are no longer as rich as they were. But accept it they must.

9. I hope we Malaysians appreciate what is happening around the world. If we don't then we may become very poor and will not recover for a long time.