VIDEO STUDY GUIDE: COMMANDING HEIGHTS: THE BATTLE FOR THE
WORLD ECONOMY: PART 2: - THE AGONY OF REFORM
KEY PLAYERS AND DEFINITIONS THAT YOU MAY NOT BE FAMILIAR
WITH
1. JEFFEREY SACHS – CONSERVATIVE FREE MARKET ECONOMIST AND
PROFESSOR AT HARVARD UNIVERSITY. HE IS A DISCIPLE OF HAYEK
AND FRIEDMAN. HE EFFECTIVELY LEADS THE REORGANIZATION OF
THE GLOBAL ECONOMY BY LEADING THE RESTRUCTURING OF
MANY OF THE COMMUNIST AND SOCIALIST ECONOMIC SYSTEMS
THAT WERE NOT WORKING - BOLIVIA, ARGENTINA, POLAND, THE
SOVIET UNION
2. ANATOLY CHUBAIS AND YEGOR GAIDAR – RUSSIAN ECONOMISTS
(GAIDAR ALSO A PRIME MINISTER) THE FIRST RUSSIAN ECONOMISTS
TO SPEAK OUT IN FAVOR OF FREE MARKETS
3. SHOCK THERAPY – TERM USED TO DESCRIBE ABANDONING ONE
ECONOMIC SYSTEM FOR ANOTHER LITERALLY OVERNIGHT
4. MIKHAIL GORBACHEV – RUSSIAN PRESIDENT WHO ENDED THE COLD
WAR, ABANDONED COMMUNISM, AND DISSOLVED THE SOVIET
UNION. DIDN’T MOVE FAST ENOUGH TO CHANGE RUSSIA’S
ECONOMY, BUT STILL IS CONSIDERED ONE OF THE BRAVEST MEN
OF MODERN TIMES, HE RESIGNED AFTER LOSING THE NATION’S
CONFIDENCE DESPITE PUTTING DOWN A COUP DE’ ETAT.
5. PERESTROIKA – MIKAL GORBACHEV’S ECONOMIC REFORM PLAN FOR
THE SOVIET UNION
6. LECH WALESA - AS HEAD OF THE “SOLIDARITY” LABOR MOVEMENT
IN POLAND, HE LED THE REVOLUTION TO OVERTURN COMMUNISM
AND WAS SUCCESSFUL. HE LATER BECAME PRIME MINISTER.
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WALESA IS ALSO CONSIDERED ONE OF THE BRAVEST MEN OF
MODERN TIMES
7. THE RUSSIAN “OLIGARCHS” – AN OLIGARCHY OF YOUNG BUSINESS
MOGULS WHO TOOK CONTROL OF THE COMMANDING HEIGHTS
INDUSTRIES OF THE SOVIET UNION FROM THE RED DIRECTORS.
THEY ALSO BOUGHT EXTREME POLITICAL POWER BY FUNDING
AND BUYING BORIS YELSTIN’S ELECTION TO PRESIDENT
8. “RED DIRECTORS” OLD SOVIET COMMUNIST INDUSTRY MANAGERS
WHO HELD ON TO CONTROL (ACTUALLY OWN) THE INDUSTRIES
AFTER THE COLLAPSE OF THE SOVIET UNION. THEY WERE VERY
POWERFUL AND ACTUALLY CONTROLLED THE COUNTRY SINCE
THEY CONTROLLED THE COMMANDING HEIGHTS
9. BORIS YELTSIN - CORRUPT RUSSIAN PRESIDENT WHO FOUGHT OFF
THE RESURGENT COMMUNIST PARTY BUT FAILED TO FULLY
IMPLEMENT FREE MARKET REFORMS CRIPPLING RUSSIA FOR MOST
OF THE 1990’s
10. DENG XIAOPING – VISIONARY CHINESE LEADER WHO REPLACED
REVOLUTIONARY MAO TSE TUNG. STARTED CHINAS’s TURN AWAY
FROM ITS COMMUNIST ECONOMIC SYSTEM AND TOWARD A MIX
OF SOCIALISM AND CAPITALISM
THE AGONY OF REFORM
*** THE SOVIET UNION AND THE “IRON CURTAIN” - POLITICAL
PRISONER/SLAVE LABOR WAS A CRUCIAL COMPONENT OF THE SOVIET
ECONOMY AND SOVIET INFLUENCE WAS EVERYWHERE - - - - - - - - THE TRUTH BEHIND THE CURTAIN WAS THAT THE SOVIET UNION WAS
ONLY INTERESTED IN __________________ PRODUCTION AND THAT THE
OVERALLL ECONOMY WAS ______________________
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THE BIGGEST PROBLEM WAS THAT PEOPLE DID NOT WANT TO WORK
BECAUSE THERE WAS NO ______________________
***INDIA – THE MODEL OF SUCCESSFUL SOCIALISM?
THE GOVERNMENT RUN ECONOMY HAD BECOME SO CUMBERSOME
THAT IT MADE CONDUCTING BUSINESS IMPOSSIBLE. WHAT CLASSIC
MARKET REACTION DID THIS CREATE?
*** LATIN AMERICA - CHILE’S SOCIALIST EXPERIMENT
PRESIDENT ALLENDE’S SOCIALISM LEADS TO A __________________ LED BY
PINOCHET
PINOCHET DOES NOT HAVE AN ECONOMIC PLAN AND INFLATION
SOARS TO ________________% MONTHLY!!!! WHO DOES PINOCHET CALL ON
FOR HELP??
PINOCHET’S ARMY LEADERS FAVORED A __________________ ECONOMY.
WHY?
FRIEDMAN TELLS PINOCHET HE IS DOOMED IF HE DOES NOT DO TWO
THINGS:
1. _______________________ BUSINESSES
2. ________________________TARIFFS
IN THE SHORT RUN THE TURN TO FREE MARKETS CAUSES CHILE
EXTREME PAIN AS UNEMPLOYMENT HITS ____________________%
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IN THE LONG RUN THE TURN TO FREE MARKETS MAKE CHILE THE
_____________________ COUNTRY IN SOUTH AMERICA
IN THE END THE ECONOMIC CHANGES ALSO CAUSE A POLITICAL
CHANGE AS A ________________________ EVENTUALLY REPLACED THE
JUNTA
*** THE SOVIET UNION - THE CRACKS BEGIN TO SHOW - 1985
ANATOLY CHUBAIS AND YEGOR GAIDAR FIND A POLITICIAN WHO
APPEARS TO UNDERSTAND THAT THE SOVIET COMMUNIST SYSTEM IS
NOT WORKING. HIS NAME IS MIKHAIL GORBACHEV. GORBACHEV
INTRODUCES HIS REFORM PROGRAM CALLED “PERESTROIKA” - - - - - WHAT TYPE OF REFORM APPROACH WAS THIS?
1987 - IN HIS FAMOUS SPEECH AT THE BERLIN WALL, WHAT DID
PRESIDENT REAGAN MEAN WHEN HE SAID, “MR. GORBACHEV, TEAR
DOWN THIS WALL”?
***POLAND - THE RISE OF SOLIDARITY AND FREE MARKETS
WHAT WAS MARGARET THATCHER TRYING TO DO WITH HER VISIT TO
POLAND IN 1988 AND THE DEMAND TO MEET WITH LECH WALESA?
THE SOLIDARITY LABOR UNION BECAME 10 MILLION STRONG AND WAS
OPPOSED TO __________________________________________________________
***BOLIVIA – ANCHORING LATIN AMERICA’S LOST DECADE
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BOLIVIA IS ONE OF LATIN AMERICA’S POOREST AND UNSTABLE
NATIONS. BY THE 1980’S IT HAD EXPERIENCED ______________________
MILITARY COUP DE’ETAT
HOWEVER, BY THE 1980’S WHAT WAS BOLIVIA’S BIGGEST PROBLEM AND
WHAT WAS THE PRIME CAUSE OF THE PROBLEM?
WHEN JEFF SACHS GOES TO BOLIVIA TO HELP, WHAT DOES HE FIND
THE INFLATION RATE TO BE?
GONI DE LOSADA, BOLIVIA’S FINANCE MINISTER, COMES UP WITH A
PLAN THAT IS CALLED _________ _____________________- WHAT ARE THE 4
PARTS OF THIS PLAN:




WHAT WERE THE RESULTS OF DE LOSADA’S PROGRAM?
*** BACK TO POLAND – 1989
IN FREE ELECTION SOLIDARITY WINS 99% OF THE SEATS IN PARLIAMENT.
THE HEAD OF POLAND’S COMMUNIST PARTY CALLS MIKHAIL
GORBACHEV LOOKING FOR HELP (MILITARY HELP TO CRUSH THE
OPPOSITION AS THEY HAD DONE IN THE PAST). GORBACHEV TELLS HIM
TO JUST LET THINGS BE .. .. … THIS WAS CALLED THE PHONE CALL
THAT ENDED THE ________________ __________________
LECH WALESA IMPLEMENTS “SHOCK THERAPY” JUST LIKE IN BOLIVIA. IN
THE LONG RUN POLAND BECAME THE MODEL OF FREE MARKETS, BUT
IN THE SHORT RUN .. .. …
PRICES ____________________________
_________________ OCCURRED
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WHAT DID POLAND FIND MORE DIFFICULT TO CHANGE/PRIVATIZE?
THE SOVIET UNION WATCHES WHAT IS GOING ON IN POLAND AND
BEGINS TO DRAW UP ITS OWN PLAN TO CHANGE, BUT DID IT?
***CHINA - 1989 THE SEEDS ARE SOWN FOR CHINA’S CURRENT GROWTH
DENG XIAOPING HAD FIGURED THINGS OUT WHEN CHAIRMAN MAO
WAS IN POWER. WHEN HE BECOMES LEADER HE QUIETLY BEGINS TO
TURN CHINA AWAY FROM A COMMUNISM/CENTRAL PLANNING TO A
SYSTEM OF SOCIALISM WITH CHINESE __________________
DENG SAVED CHINA FORM WHAT FATE?
***BACK TO THE SOVIET UNION/RUSSIA 1991
ECONOMIC REFORMS DID NOT MOVE FAST ENOUGH IN THE SOVIET
UNION AND THIS LED TO TWO THINGS:
1. GORBACHEV’S CREDIBILITY IS SEVERELY DAMAGED BY A
________________________
2. GORBACHEV THEN ________________THE SOVIET UNION
ALTHOUGH THE NEW PRESIDENT OF RUSSIA, BORIS YELTSIN, MOVES
FAST HE FACES SERIOUS PROBLEMS SUCH AS:
1.
2.
3.
4.
NO _______________________
NO _______________________
MASSIVE __________________
AN INFLATION RATE OF __________________
YEGOR GAIDAR, NOW YELTSIN’S FINANCE MINISTER, MAKES
REVOLUTIONARY MASSIVE CHANGES IN POLICIES AND LAWS, THE TWO
MOST IMPORTANT WERE:
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1. ABOLISHING __________________ CONTROLS
2. ABOLISHING THE LAW THAT PROHIBITED ________________
ENTREPRENEURISM SKY ROCKETS, BUT SO DO _______________
***BACK TO INDIA
WITH INDIA’S ECONOMY STAGNANT AND THE GOVERNMENT IN DEBT,
THE COLLAPSE OF THE CENTRALLY PLANNED SOVIET UNION HAD A
PROFOUND IMPACT. INDIA MOVED QUICKLY TO GET THE GOVERNMENT
OFF THE BACKS OF THE PEOPLE. THEY MADE THE FOLLOWING 4
CHANGES:
1.
2.
3.
4.
STATE CONTROL OF THE ECONOMY WAS __________________
SUBSIDIES WERE _____________________
TARIFFS WERE ______________________
REGULATION LICENSES WERE _________________________
WHAT WERE THE RESULTS?
***BACK TO RUSSIA
ALTHOUGH MANY SIGNIFICANT CHANGES HAD BEEN MADE, THE
COMMANDING HEIGHTS OF RUSSIA’S ECONOMY WERE STILL IN THE
HANDS OF THE GOVERNMENT. GAIDAR, CHUBAIS AND THE OTHER
ECONOMISTS COME UP WITH A PLAN TO AUCTION OFF THE MAJOR
INDUSTRIES INTO PRIVATIZATION, BUT WITH PEOPLE HAVING NO
MONEY TO INVEST THEY COME UP WITH THE BRIGHT IDEA OF GIVING
ALL CITIZENS 10,000 RUBELS (RUSSIAN CURRENCY) WORTH OF
PRIVATIZATION ________________________________
PEOPLE NOW WOULD HAVE SOMETHING TO INVEST, HOWEVER WHAT
WAS THE PROBLEM THAT THE PRIVATIZATION PLAN RAN INTO?
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THE PRIVATIZATION PROGRAM GETS STARTED JUST BEFORE THE
DEALINE THAT HAD BEEN SET FOR IT. THE DELAY IT STARTED COSTS
__________ HIS JOB. ON THE OTHER HAND, THE START OF THE
PRIVATIZATION CAUSES THE FOLLOWING THINGS TO OCCUR:
1. A SMALL __________ MARKET BEGINS TO GROW
2. STOCK ____________BEGINS TO GROW
3. ___________ BEGINS TO RUN RAMPANT
IN 1995 THE RUSSIAN “OLIGARCHS” APPEAR AND BEGIN TO MOVE IN ON
THE “RED DIRECTORS” IN AN EFFORT TO ACQUIRE, AND PRIVATIZE, THE
COMMANDING HEIGHTS INDUSTRIES. THE RED DIRECTORS ARE DEEPLY
ENTRENCHES AND THE OLIGARCHS NEED WHAT TYPE OF HELP TO
ACHIEVE THEIR GOALS?
YELTSIN NEEDS HELP IN HIS DESPERATE BATTLE WITH THE RESURGENT
COMMUNISTS FOR THE 1996 ELECTIONS. HE AND THE OLIGARCHS NEED
EACH OTHER SO THEY WROTE OUT THE “THEFT OF THE CENTURY” .
WHO GETS WHAT IN THIS DEAL?
IN THE END THE OLIGARCHS OWN EVERYTHING AND THE ECONOMY IS
STRANGLED. WHAT HAPPENS TO RUSSIA IN 1998 AND YELTSIN IN 2000?
***BACK TO POLAND
THE REVOLUTION IS AT FULL SPEED: THREE ASTONISHING FACTS:
 _______________ MILLION SMALL BUSINESSES ARE CREATED
 SMALL BUSINESS EMPLOY ________________ OF POLAND’S
WORKFORCE
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 SMALL BUSINESS PRODUCE _________________ PERCENT OF THE
NATIONS OUTPUT
*** NO NOTES FOR A FEW MINUTES AS THE FILM NOW QUICKLY
UPDATES THE STORIES IN LATIN AMERICA, INDIA, AND THEN RETURNS
TO RUSSIA
*** RUSSIA
SOME PEOPLE THINK RUSSIA IS TURNING THE CORNER WHEN VLADIMIR
PUTIN IS ELECTED PRESIDENT AND HE MOVES TO LIMIT THE POWER OF
THE __________________ AND PUTS IN MORE REFORMS
*** SUMMARY***
CAPITALISM AND FREE MARKETS HAD WON!!! THIS SET UP A GLOBAL
MARKET PLACE THAT IS NOW TIED TOGETHER KBY THREE CRITICAL
FACTORS:
 _____________________________________
 _____________________________________
 _____________________________________
THE ERA OF GLOBALIZATION HAD BEGUN!!
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VIDEO STUDY GUIDE - COMMANDING HEIGHTS: THE BATTLE FOR THE
WORLD ECONOMY – PART 3: THE NEW RULES OF THE GAME
TERMS THAT YOU MAY NOT BE FAMILIAR WITH
1. CONTAGION - A FINANCIAL SYSTEM VIRUS LIKE A CLASSIC “BANK
RUN” OR PANIC. INVESTORS LOOSE CONFIDENCE IN A COUNTRY’S
ABILITY TO PAY ITS DEBTS AND BEGIN TO WITHDRAW THEIR
MONEY/INVESTMENTS
2. CALPERS - THE STATE OF CALIFORNIA’S STATE EMPLOYEE PENSION
(RETIREMENT) FUND IS ONE OF THE LARGEST IN THE WORLD
COVERING OVER ONE MILLION EMPLOYEES
3. IMF – INTERNATIONAL MONETARY FUND
THE NEW RULES OF THE GAME
TWO QUESTIONS ARISE:
1. IS TERRORISM THE DARK SIDE OF GLOBALIZATION?
2. CAN PROSPERITY BE DELIVERED TO EVERYONE?
DURING THE 1990’S CAPITALISM FUELDED THE GREATEST
______________________ IN HISTORY
IT IS SAID THAT WE NOW LIVE IN A NEW WORLD AND ECONOMY IN
WHICH “EVERYONE HAS A STAKE, BUT NO ONE HAS ____________________”
GLOBALIZATION HAS BROUGHT RECORD PROSPERITY, BUT ALSO NEW
PERILS WE DO NOT YET UNDERSTAND. IT HAS SPARKED A GREAT
DEBATE OVER _______________________ AND _____________________
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*** NAFTA - NORTH AMERICAN FREE TRADE AGREEMENT - PUTTING THE
IDEA OF FREE TRADE TO THE TEST
PRESIDENT CLINTON COMPLETELY CHANGES HIS POSITION ON NAFTA
FROM WHAT HE SUPPORTED DURING THE CAMPAIGN. HE NOW
COMPLETELY SUPPORTS NAFTA WITHOUT CONDITIONS. THIS WAS
VIEWED AS A “SELLOUT” BY HIS SUPPORTERS. WHAT GROUP WAS THE
MOST UPSET/ANGRY?
WHAT HAPPENED IMMEDIATELY AFTER THE NAFTA AGREEMENT WAS
SIGNED?
WHAT PERCENTAGE OF THE TV’S THAT ARE BOUGHT IN THE UNITED
STATES COME FROM MEXICO?
*** TIAJUANA MEXICO - THE BALL STARTS ROLLING .. .. .. ..
HOW MANY WORKERS FOUND JOBS ALONG THE BORDER?
WHAT PERCENTAGE OF MEXICO’S POPULATION LIVES IN POVERTY?
UNION LEADERS SAID THAT NAFTA SHIFTED THE BALANCE OF
BARGAINING POWER TO FAVOR ___________________________
SINCE NAFTA WENT INTO EFFECT IT HAS HAD AN ADVERSE IMPACT ON
OVER ________________ AMERICAN JOBS, YET EFFORTS TO OTHER
COUNTRIES HAVE CREATED OVER ___________________ JOBS AND THE
VOLUME OF TRADE HAS _________________
THE BIGGEST THING THAT IS NOW TRADED, BUT IS REALLY NOT
VISABLE TO THE GENERAL PUBLIC IS ____________________
*** SACRAMENTO, CALIFORNIA
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CALPERS (THE CALIFORNIA STATE WORKERS PENSION FUND), WAS
INVESTING HEAVILY OVERSEAS AND AT ONE TIME ACTUALLY
CONROLLED _________ PERCENT OF FRANCE’S STOCK MARKET
PENSION FUNDS HAVE BECOME THE “FINANCIAL POWERHOUSES” OF THE
WORLD BECAUSE THEY NOW CONTROL HUGE SUMS OF _______________
“THIRD WORLD” NATIONS HAVE BEEN RENAMED TO REFLECT
INVESTMENT OPPORTUNITY. THEY ARE NOW CALLED ______________
_______________________
MANY DEVELOPING NATIONS HAVE BEGUN TO VIEW BIG MONEY
POWERS (NATIONS AND CORPORATIONS) AS THREATS TO THEIR
_____________________
*** THE FIRST “REAL TIME” GLOBAL FINANCIAL CRISIS OF THE 21ST
CENTURY - THE MEXICAN CRISIS OF 1994
WHO BEGINS TO FLEE MEXICO WHEN THE SANDINISTA REBELS LAUNCH
THEIR UPRISING?
SENIOR UNITED STATES GOVERNMENT OFFICIALS ADVISE THE PRESIDENT
THAT IT IS VERY LIKELY THAT:
1.
2.
THE MEXICAN PESO WILL _____________________________
A MASS EXODUS OF _______________ TO THE UNITED STATES
WILL START
AS MEXICO IS ABOUT TO DEFAULT ON ITS FOREIGN DEBT THE UNITED
STATES SETS A HORRIBLE PRECEDENT BY GIVING MEXICO A _____________
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AS MOST OF THE HOLDERS OF MEXICO’S DEBT WERE AMERICANS, THIS
BAILING OUT OF AMERICANS BY THE UNITED STATES GOVERNMENT
REALLY SENT THE WRONG MESSAGE…. …… …. IT ENCOURAGES
AMERICANS NOT TO WORRY ABOUT, OR CONSIDER ____________________
WHEN MAKING INVESTMENTS
THE MEXICAN CRISIS ALSO PROVIDED THAT _________________ HAD
BECOME A TREMENDOUS FORCE AND HAD TRANSFORMED THE
FINANCIAL MARKETS AS MASSIVE AMOUNTS OF MONEY COULD BE
MOVED IN SECONDS
****THE TECHNOLOGICAL REVOLUTION AND THE DEVELOPMENT OF THE
GLOBAL VILLAGE
THE TECHNOLOGICAL REVOLUTION OF THE 1980’S AND 1990’S CREATED A
COMMUNICATIONS EXPLOSION. IN TWO DECADES THE NUMBER OF
INTERNATIONAL PHONE CALLS MADE WENT FROM 200 MILLION
ANNUALLY UP TO _____________________
THE TECHNOLOGICAL REVOLUTION CREATED A BORDERLESS WORLD
AND GAVE POWERFUL TOOLS TO A NEW TYPE OF BUSINESS PERSON, THE
__________________ WHO COULD THINK AND ACT LIKE A
MULTINATIONAL CORPORATION BY VIEWING THE WORLD AS A
_____________________ ____________________________
TODAY OVER ________________ PERCENT OF THE WORLD’S SOFTWARE
ENGINEERS ARE FROM ___________________
THE CEO OF INFOSYS DEFINES “GLOBALIZATION” AS:
1.
PRODUCING WHERE IT IS MOST ____________________________
2.
SELLING WHERE IT IS MOST ______________________________
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3. SOURCING CAPITAL WHERE YOU CAN GET THE
______________________________
WHAT PLACE IS CONSIDERED THE SPIRITUAL CENTER OF THE GLOBAL
VILLAGE?
________________________________________________________________________
*** ARE WE GROWING TOO FAST, MAKING TOO MUCH PROGRESS????
SHANGHAI, CHINA
FOR THE FIRST TIME OVER 1/4TH OF THE GLOBAL POPULATION IS
ENTERING THE GLOBAL MARKET!!! THE IMPACT IS THAT OVER
__________________________ CHINESE PEOPLE HAVE BEEN LIFTED OUT OF
POVERTY
THIS ERA OF TRUE GLOBALIZATION HAS SEEN THE LARGEST AMOUNT
OF HUMAN ________________________ IN HISTORY
IT IS ESTIMATED THAT OVER 80% OF FUTURE ECONOMIC GROWTH IS
EXPECTED TO OCCUR THROUGH ________________ RATHER THAN THE
___________________________
*** SINGAPORE
WHEN THE BRITISH ARRIVED IN THE 1800’S THEY FOUND A FISHING
VILLAGE OF 120 PEOPLE AND INFERTILE GROUND. TODAY SINGAPORE IS
ONE OF THE WORLD’S FINANCIAL CENTERS, AND LIKE MOST SOUTH
ASIAN ECONOMIES, IS GROWING AT OVER _____________ PERCENT A
YEAR!!
**** TOKYO
EARLY IN THE TECHNOLOGICAL CAPITALIST REVOLUTION, JAPAN, THE
WORLD’S ___________________ LARGEST ECONOMY WAS AN EXCEPTION.
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THE REASON FOR THIS WAS THAT JAPANESE BANKS HAD HELD OVER
________________ IN BAD DEBTS
ADDITIONAL MISTAKES BY JAPAN:
1.
TRADITIONALLY JAPAN HAD BEEN A CLOSED SOCIETY BASED
ON STRONG ______________ TYPE VALUES
2.
WITH THEIR EXPORTS SKYROCKETING THEY MISTAKENLY DID
NOT PERMIT ENOUGH ___________________ TO ENTER THE
COUNTRY AND THEY REGULATED THE COMMANDING HEIGHTS
**** A GLIMPSE OF POTENTIAL FUTURE HORROR - GLOBAL CONTAGION
AND POSSIBLY A NEW FORM OF COLONIALISM
BANGKOK, THAILAND
DURING THE BOOM TIMES OF THE 1990’S , THAILAND OPENED ITS
CAPITAL MARKETS AND HAD AN EASY MONEY POLICY. IN JUST 4 YEARS
FINANCIAL INSTITUTIONS TRIPLED THE AMOUNT OF LOANS ISSUED TO
_____________________
THAILAND MADE THE MISTAKE OF NOT HAVING ITS ECONOMIC
INFRASTRUCTURE KEEP PACE WITH THE CAPITAL MARKETS - IT DID NOT
DEVELOP ITS FINANCIAL REGULATORY SYSTEM, ETC. PROBABLY THE
BIGGEST PROBLEM WAS THE “BOK” (THAILAND’S CURRENCY) WAS FIXED
TO THE UNITED STATES DOLLAR AND KEPT ________________ VALUE
PRESSURE MOUNTS AND FINALLY IN 1997 THE BOK HAS TO BE
DEVALUED AND THE ECONOMY GOES INTO A FREE FALL. THE IMF
(INTERNATIONAL MONETARY FUND) CAN NOT HELP BECAUSE THE
PROBLEM IS TOO BIG, SO THAILAND TURNS ONCE AGAIN TO THE
_________________________________
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PANIC SETS IN AS PEOPLE BEGIN TO WONDER IF ALL THE ASIAN
ECONOMIES ARE IN THE SAME SITUATION - THE RUN ON THE BANK
STARTS JUST LIKE IT DID IN MEXICO, BUT NOW ON ALMOST A GLOBAL
SCALE. OVER ______________ QUICKLY BEGINS TO FLOW OUT OF JUST
SOUTHEAST ASIA
THE IMF TAKES THE LEAD IN TRYING TO CONTAIN THE PANIC AND
REQUIRES THE SOUTHEAST ASIAN COUNTRIES TO:
1.
CUT ____________________ SPENDING
2.
RAISE ________________ RATES
3.
ELIMINATE ______________ IN THEIR SYSTEMS
**** MANY PEOPLE BEGAN TO BE DISTURBED BY WHAT THEY WERE
SEEING IN SOUTHEAST ASIA. THEY CAME TO UNDERSTAND THAT THERE
WAS THE POTENTIAL, VIA RUMOR, TO DESTABILIZE A GOVERNMENT BY
QUICKLY UNDERMINING THEIR CURRENCY, MAKING IT POOR, AND
MAKING IT BEG FOR HELP. FOR THE HELP, THE HELPING NATION
WOULD GET CONTROL OF THE POLICIES OF THE COUNTRY …….THIS IS
NOW VIEWED AS A POSSIBLE NEW KING OF COLONIALISM CONQUERING A COUNTRY WITHOUT MILITARY FORCE
SOUTH KOREA
THE PANIC IS STILL SILENTLY SPREADING AND THE 11TH LARGEST
ECONOMY IN THE WORLD, SOUTH KOREA, SAYS THAT IT HAS BEEN
LYING ABOUT THE AMOUNT OF MONEY IT HAS AND IS ALSO READY TO
DEFAULT ON ITS FOREIGN DEBT. THE IMF AND THE UNITED STATES
COME TO ITS AID AND UNDERWRITE THE LARGEST BAILOUT IN HISTORY
TOTALING _____________________________________
RUSSIA
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AFTER THE FALL OF COMMUNISM RUSSIA WAS SEEN AS THE PREMIER
“EMERGING MARKET” AND AN ABSOLUTE SAFE BET. HOWEVER, IT ALSO
DEFAULTS AND THE PANIC IS NOW RAGING. UNITED STATES SECRETARY
OF THE TREASURY ROBERT RUBIN AND FED CHAIRMAN ALAN
GREENSPAN ADVISE PRESIDENT CLINTON THAT THESE CONDITIONS
HAVE _____________________________ SEEN BEFORE
UNITED STATES
CONTAGION NOW BEGINS TO HIT THE UNITED STATES, A HEDGE FUN
CALLED LCTM (LONG TERM CAPITAL MANAGEMENT) IS NEAR DEFAULT
BECAUSE OF ITS OVERSEAS INVESTMENTS ( FOREIGN BONDS, ETC.) , IT IS
ABOUT TO LOOSE OVER ____________________________________
THE FEDERAL RESERVE BANK OF THE UNITED STATES SAYS THAT IT
CAN NOT HELP BECAUSE LCTM IS A PRIVATE FIRM AND IT WOULD NOT
BE FAIR IN THE LONG TERM PUBLIC INTEREST. THE FED LEAVES THE
RESCUE OF LCTM TO THE _____________________________________
*** THE GLOBAL DEBATE AND DIVIDE
ANTIGLOBALISM SENTIMENT IS RISING OUT OF FEAR. THE
_______________________________________ LED THE PROTESTS AND RIOTS
DURING THE SEATTLE WTO (WORLD TRADE ORGANIZATION) MEETING IN
THE LATE 1990’S
THE COSTS OF OPENING WORLD MARKETS WAS MASSIVE UNION JOB
LOSSES. DESPITE THIS, THE OPENING OF MARKETS CREATED OVER
______________________________ NEW JOBS IN THE UNITED STATES
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THE DEVELOPING WORLD/NATIONS ____________________________ THE
PROTESTORS AND WANT MORE ________________________
PRESIDENT CLINTON, WELL KNOWN FOR SUPPORTING WHATEVER
WOULD HELP HIM WITH AN ELECTION OR MAINTAIN POPULARITY, WAS
UP FOR RE-ELECTION. HE ABANDONS HIS FREE TRADE POSITION TO
SUPPORT THE UNIONS AND THIS CAUSES THE WTO SUMMIT TO BE A
______________________________
AS POVERTY BECOMES THE FOCAL POINT, AND THE WORLD BANK THE
NEXT TARGET, THOSE WHO FAVOR FREE TRADE AND OPEN MARKETS
CLAIM THAT ______________ DID NOT CAUSE GLOBAL POVERTY, IT JUST
HAS MADE MORE PEOPLE MORE AWARE OF IT
HOWEVER, THE FACT IS THAT THERE IS A BIG GAP IN “WELL BEING”
ACROSS THE GLOBE AS _____________ OF HUMANITY LIVES IN THE
DEVELOPING WORLD
THE FAMOUS ECONOMIST, HERNANDO DE SOTO, CLAIMS THAT
CAPITALISM IS A GREAT TOOL FOR HELPING POOR PEOPLE ATTAIN
PROSPERITY, HOWEVER, HE SAYS THE REASON WHY CAPITALISM HAS
NOT BEEN ABLE TO HELP THE POOR IS BECAUSE THE POOR IN ALL
“EMERGING/DEVELOPING NATIONS/ MARKETS” DO NOT HAVE
_____________________ ___________________
DE SOTO BELIEVES THAT PEOPLE ARE _________________ BY NATURE, BUT
IN THE DEVELOPING WORLD THEY ARE LOCKED OUT OF THE SYSTEM
AND THE GLOBAL MARKET PASSES THEM BY
WITHOUT PROPERTY RIGHTS PEOPLE ARE EXCLUDED FROM:
1. GETTING A ______________________
2. OBTAINING __________________
FORMER PRESIDENT CLINTON MAKES A GOOD POINT ABOUT THE
FUTURE. HE SAYS THAT IT IS NOT SUFFICIENT TO BUILD A PEACEFUL
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FREE WORLD, YOU ALSO NEED ____________________, IT IS AN ABSOLUTE
NECESSITY
 THEN CAME THE 911 EVENTS AND THIS LEAVES US WITH THE
CONSIDERATION THAT WE MAY STILL NOT REALLY
UNDERSTAND THE NEW RULES THAT THEY MAY STILL NOT
HAVE BEEN ALL DEFINE!!
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