Currency wars

DIE HARD III

Herman Tiu Laurel

12/9/2012

Daily Tribune

The most significant sectors of the Philippine economy and population, the overseas Filipino workers (OFWs), exporters and business process outsourcing (BPOs), are facing a crisis. The peso is threatening dive below P40 to the dollar in 2013. The peso and the Filipino dollar earning sectors have already suffered 30 percent loss of their exchange income since 2004 when the peso rate was at P56, now it is at P40.85, further losses will cut even deeper into the purchasing power of the sectors. Even as the BS Aquino government boasts of 7.1 percent virtual reality growth, the real economy is actually much harsher on the people and consumers. In reviewing the Philippine peso exchange rate history, I scanned Internet sources through the night and found many historical revisionism in the data and interpretations of our currency history. They do not reflect what actually happened in the five decades past of the World and our country's currency history.

The Asian financial crisis of 1997-1998 for example was reported by Wikipedia without any mention of George Soros' role in the "speculative attack" on the Thai Baht and other Asian currencies and stock markets. It put the blame on Asian economies for allegedly mismanaging their financial situations, an interpretation that seriously distorts the facts. The Asian financial crisis was a premeditated attack timed at the point when Asia was at the peak of its financial boom, a boom the Western financial establishment itself encouraged. Then Soros and company pulled the rug from under the Asian economies. The timing of the Asian financial crisis is also construed by some as an attempt to subdue Asia as its Tiger economies soared, and the handover of Hong Kong back to China in 1997 signaled the final resurgence of the Sleeping Dragon.

Indonesia had bought the entire Naval assets of the defunct East German Republic to leap frog as a naval power in the region. The Asian financial crisis stopped Suharto right there and brought him down. The FVR regime did no better; the Peso plunged to P50 from P28, despite "Finance Manager of the Year" Bobby de Ocampo at his side. Other countries withstood the crisis like Malaysia with Mahathir's currency and capital controls, and South Korea population donated its gold and jewelry to the government to quickly repay the country's debts. Hong Kong turned the tables on Soros' ilk by "double play," defending its currency and boosting the Hong Kong stock market that speculators tried to short. On the peso's travails, I came across a blog, "The Coffee" of Mike from Valencia, Negros Oriental, an Ateneo 2005 graduate, working at a Makati technology company, who reviewed the peso history.

Mike correctly begins at the peso devaluation from P2 to P 3.70 under former President Diosdado Macapagal, but after that he seems to have been waylaid. Mike didn't explain that the precipitous crash came after Macapagal "decontrolled" the economy. Mike goes on to The Asian financial crisis and admits "I can't understand it, no matter how many times I check Wikipedia, but the peso crashes from P26 to P41 to the dollar in a single frickin' year."
That peso actually went as low as P45 to P48. Maybe Mike can pick up from our recollection and study the reality of "currency attacks." What I do need to correct is Mike's take on the peso crash under Estrada saying "Economic mismanagement and political instability… plus charges of corruption … peso nosedives …to P50." Then Mike stops there without citing the P56 crash of the peso in 2004 under Arroyo.

It was clear from Day 1 of the Estrada administration that forces were out to destabilize and oust the "masa" president. Erap disapproved of "sovereign guarantees," power and water rate increases, and the Omnibus Power bill privatizing the National Power Corp. Erap routed the Moro Islamic Liberation Front at Camp Abubakar which former US President Clinton tried to stop. The "currency attack" was kicker to finally oust Erap at Edsa II, coordinated between Makati bankers (led by Dick Romulo at the forefront of the preparing anti-Estrada bank witnesses) and the foreign bankers. Gloria Macapagal-Arroyo, whose regime The Coffee blog seemed to omit from discussion, doubled the Philippine debt over all previous presidents causing the massive peso crash to P56 in 2004. Today, the peso fluctuates at around P40.85, the OFWs, exporters and BPOs are already crying out for clear policy directions to defend their hard earned peso values vis-à-vis the dollar.

Finance Minister Guido Mantega of Brazil accuses the US of waging a "currency war" and strategic devaluing its currency to aid its economic recovery, but the BS Aquino government appears clueless and his BSP seemingly paralyzed. Every concerned Filipino, including Mike, should try to read Jim Rikards,' "Currency Wars" to understand that the a nation is already have always been victimized by a continuing "currency war" from Western and local financial powers.

(Watch GNN's HTL show, GNN Channel 8, Saturdays, 8:15 to 9 p.m., 11:15 p.m. and Sunday 8 a.m., and over www.gnntv-asia.com: "The True Picture of the Economy" with Ibon E.D. Sonny Africa and KME economist Hiro Vaswani; tune to 1098AM radio Tuesday to Friday 5 to 6 p.m. http://newkatipunan.blogspot.com)