The Asian Currency Crises

Introduction The average Canadian has become conditioned to rising prices, however it is impossible to ignore the impending threat of a sustained decline in prices and wages. Roger Bootle, a respected British analyst, points out that the chronic inflation experienced by Western economies in recent decades is unusual, as in the past centuries prices tended to fall as often as they rose. Today, however inflation has almost disappeared, due to globalization and changes in technology …

…effect on global economies such as Canada in the months and even years to come. However, these effects are difficult to predict leaving consumers and investors to the mercy of the market. If the effects currently being demonstrated in Asia (falling demand, decreased production, lower profits) are duplicated across the worldwide economy, such a deflation would induce a slowdown in spending, devestate growth, drive thousands of companies into bankruptcy and throw millions out of work.