Despite the hysterical efforts of the U.S. President's Working Group on Financial Markets ("the Plunge Protection Team"), the world's present financial system is already in the last phase of a terminal collapse. Only lunatics, and other desperate fools, such as U.S. Treasury Secretary Larry Summers, are still hoping to keep that system from collapse. All of the world's intelligent and well-informed government officials, leading bankers, and economists, are preparing for the kind of world which will come into existence, very soon, after the present IMF system has been wiped out.
As I have warned, repeatedly, no one can predict the exact hour of the day the present system's bankruptcy will be made official. Since the fateful blunders of the October 1998 Washington monetary conference, the system as a whole has entered fully into its terminal phase of collapse. Exactly how it will collapse—whether by deflationary chain-reaction, by hyperinflationary explosion, or by being placed in bankruptcy-reorganization by governments—is a "Utah death-sentence" style of choice, still to be made by relevant governments; but the collapse is now inevitable, and will occur soon—very soon, perhaps before November, perhaps before the August U.S. Democratic Party nominating convention. Really intelligent people, around the world, are treating that oncoming collapse virtually as if it had already occurred. This is the time for all intelligent monetary systems to dictate their bequests to their prospective heirs. What remains chiefly in doubt, is whether or not the post-crash governments will be able, or willing, to honor such a last will and testament of what is presently the already doomed system.
As of September 1998, it would have still been possible, although admittedly difficult, for U.S. President William Clinton to have brought about a comprehensive reorganization of the existing International Monetary Fund. In the aftermath of the October 1998 Washington conference, especially after decisions on the Brazil crisis of February 1999, that approach to monetary reform had been virtually destroyed, by the Clinton Administration itself. Now, the establishment of the urgently needed, new international monetary system, were more likely to be built up from a combination of regional groupings, such as the proposed ASEAN-Plus-Three association aired at a recent Chiang Mai, Thailand meeting, or not at all.
In the situation defined by the presently inevitable early disintegration of the current international financial system, the imperative of even simply national economic survival, requires cooperation among the relatively most interdependent regional trading blocs. The maintenance of even the barest essentials of trade-cooperation, requires treaty-facilities of a sort needed to provide for short- to medium-term trade of some essential portions of hard-commodity traffic. The ASEAN-Plus-Three meeting, typifies the lines of cooperation which are urgently wanted in various regions of the world.
The case of the Chiang Mai meeting, and its revived deliberation on the 1997 proposal for an Asian Monetary Fund, reflects the specific form of political hysteria caused by the desperate actions of the U.S. "Plunge Protection Committee." In the effort to postpone the inevitable global financial crash until after the U.S. general election of November 2000, at least until the Democratic Party Convention of August, the U.S. launched predatory actions against both Japan and the continental European currency-bloc, the Euro. The points of vulnerability focussed upon by the Plunge Protection Committee, were the respective "Yen carry-trade" and "Euro carry-trade."
Thus, the hysteria of the Gore-campaign-dominated Clinton Administration, came very close to breaking the quarter-century-long "Trilateral" arrangement of 1975, among Wall Street, Tokyo, and continental European finance. This Gore-prompted savagery against Wall Street's crucial Tokyo and European monetary partners, represented a threat of an irreparable break among the leading elements of the present world monetary system. Although neither China nor Japan was then prepared to risk an open break with the U.S., the question was posed. The mood at the Chiang Mai meeting, is to be regarded as a relatively mild warning-shock, a warning of a likely, oncoming political form of the major monetary earthquake, a warning of the threatened break-up of the existing IMF-dominated system.