Economic Crisis and Debts
The recent movements in financial markets have not escaped our attention. The unstable course of the dollar, the imbalance in gold, known as a safe haven, and the persistent cracks in the European Union have resulted in financial markets experiencing a turbulent period.
Many countries, especially European central banks, are seeking solutions to the possibility of a new economic crisis, which naturally does not go beyond austerity policies. Now, I will share some general information with you. For a country to be able to print money, its central bank must have assets in its vault, such as gold, foreign currency, and international bonds. The same conditions must be met to issue bonds. Although oil has been added to these financial instruments in recent years, gold, foreign currency, and bonds are generally what are considered. For example, for the US to print 1 dollar, it must have 1 gram of gold in reserve.
After providing this brief explanatory information, I would like to ask you a question. If you went to illiterate locals in a mountain village in Africa, would they recognize gold and dollars? While they may not even know their own currency in many places, how do these people know about the Euro and other currencies? Clearly and openly, since the Cold War years, the US has introduced itself to the whole world by finding a new colony every 5 years on average and occupying it for various reasons, thereby exploiting the country and distributing dollars that have no backing.
So, why did the US government collect ADB dollars after the last crisis and work to prevent the dollar from falling? Did old enemies become friends? Not at all. The Chinese central bank was forced to take this path to protect itself and the Far East from its own mistakes, because nearly 85% of its bonds are US-owned. This means that economic management is not as written in the books, especially applied economics.
What I tried to convey with the examples I gave is this: Systems and practices in economic management have changed, and regional interests, which are the next stage of national interest, have started to be considered. While we are still unable to manage the economy of our tiny country, major players have started to undertake regional and even global economic projects.
A new crisis will make the rich richer and the poor poorer. It is best for us to stay away from borrowing and live within our means.
