Who is Responsible for US financial Crisis?

Pakistan Economy Watch has said that the irresponsible role of International Monetary Fund and Federal Reserve is responsible for the US financial crisis. The US authorities are still living in a cloud of self-deception that is influencing situation adversely.

The US oil and power companies, Arab petro dollars and credit rating agencies also paved the way for crisis and it seems that America will drown itself in Asian cash, said Dr. Murtaza Mughal, President, Pakistan Economy Watch.

He said the basic task of IMF was to force majority of the 185-member countries to knee down to US policies which was delivered successfully.

Many countries tried to escape the disastrous policies of IMF by accumulating dollars. Presently known reserves with Asian economies stands at 4000 trillion dollars.

After having plenty of dollars these countries naturally desired to invest money. Their natural selection was the world’s No. 1 economy. US oil and power companies and Arabs who were enjoying oil bonanza also diverted their liquidity towards US.

At this juncture the controversial American credit rating agencies awarded triple A rating to some institutions which they never deserved. This paved the way for heavy investments in the US firms which was not capable of handling it and their affairs were not transparent.

At this juncture, the US Federal Reserve and other regulators not only preferred to remain silent but neglected the opposition, said Dr. Murtaza Mughal adding that its amazing that they are still heard.

These government institutions believed in market forces which paved the way for a crisis which has now engulfed whole globe.

He said that for the first time the epicenter of crisis is in west and east is gaining a dominant positioning. Earlier the countries outside US ’enjoyed’ crisis and Americans use to be concerned about its impact on their homeland. Now Americans are facing the music and whole world is concerned about impact on their economies.

"US has simply lost all moral authority and it cannot deliver lectures any more."

"Whole world would not have been feeling the pain of US mistakes if slogans like globalization, free market economy and deregulation etc were not followed so religiously," said Dr. Murtaza Mughal.

The world will never be same and the financial health of west may not get as better as it was due to wrong policies in the wake of crisis.

The popularity of President Bush and 533-member Congress is at all times low and mistrust in plaguing the society. Top government officials are still deceiving themselves and masses. Even the presidential candidates are no exception.

Dr. Murtaza Mughal said that demise of capitalism, which is a probability will not hurt the world as much as portrayed as a single system isn’t workable enough to be trusted to run the whole world. Other options are available.