Revisiting Asian Financial Crisis for Envisioning Commodity Market Outlook (Presentation Slides)

Abstract

“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." – Rudiger Dornbusch

The above quote by German Economist holds good while analysing 1997 Asian Financial Crisis, as region enjoyed decades of buoyant growth, suddenly what started out as a currency crisis (Thai Baht) with large devaluation of domestic currencies, quickly evolved into a financial crisis in which banks were unable to repay their foreign debts. In turn, this lead to an economic crisis as domestic firms were starved of credit and went bankrupt : illiquidity turned quickly into insolvency.

Was Asian economy's growth model flawed or was it due to MULTIPLE EQUILIBRIA : both good and bad due to which an external event triggered a move from a good to a bad one or was it a Commodity /Resource Curse???

The purpose of this paper is to shed some light on this questions, post which it will analyse how it impacted Key Commodities. Followed by understanding the on-going tectonic shift in global growth as baton gets exchanged between developed & developing nations. Finally concluding with analysing the market structure for commodities and estimating the price forecasts for next year.