THE EAST ASIA ECONOMIC COMMUNITY
By
Dr. Mahathir Mohamad
on September 27, 2009 12:46 PM | Permalink | Comments (0) | TrackBacks (0)
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1. I am glad to read the report that the new Prime Minister of Japan, Yukio Hatoyama intends to pursue the proposal for an East Asian Economic Community.

2. I had always felt that the countries of East Asia should speak with one voice when negotiating with the European Union and the North American Free Trade Agreement (NAFTA). If we don't then the Europeans and the Americans would dominate such negotiations. Obviously they would want to favour themselves to our detriment.

3. This is not about hating the West as someone suggested when I drew attention to a UN Agency proposal to have a special currency to replace the US Dollar for the purpose of trade settlements and reserves. It is simply because unlike other countries the US Dollar is not backed by anything.

4. They used to hold huge quantities of gold in Fort Knox to support their dollar. Today they have neither gold nor foreign exchange reserve to back their dollar. As a result the dollar value has been fluctuating. The only thing that is holding it up is the demand for it for trade payments. Other than that the dollar is nothing but just printed paper.

5. The US has twin deficits and no savings . Where then did the United States get the three trillion dollars to bail out the banks, industrial corporations and insurance companies? The obvious answer is that it got it from thin air. Just print the money.

6. Why is it that the US can print money to bail out companies while others may not do so? Malaysia did not print money when we bailed out our companies. The money came from revenues collected by the Government and loans raised by it.

7. It is not about hating people. It is about not condoning abuses of the monetary system that the proposal is made not to use the US Dollar.

8. Now the Chinese have come out with the same idea about a special currency to replace the dollar. If we think of the huge sums of dollars held by the Chinese, this suggestion would cause them to lose a lot of money. But they must have realised that the money they are holding is pretty useless.