The Baht Breaks. After months of speculative attacks, Thailand was forced to float the Baht today. It collapsed immediately. The contagion is spreading rapidly to Malaysia, Indonesia, and South Korea.
The IMF Steps In: The International Monetary Fund is preparing massive bailouts, but the conditions—strict austerity and high interest rates—are exacerbating the economic pain.
Global Impact: While Western markets remain resilient for now, the deflationary shock from Asia is lowering global bond yields and commodity prices. Long-Term Capital Management (LTCM) is watching closely.