THE EAST ASIA ECONOMIC COMMUNITY 

By Dr. Mahathir Mohamad 

on September 27, 2009 12:46 PM | Permalink | Comments (50) | TrackBacks (0) 

 

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.

 

 

 

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