As David Harvey has noted, and as the ongoing emerging market panic confirms, capitalism never solves its crises — it merely moves them around geographically. You may not have read about it in the regular media yet, but the financial press is full of it: financial markets are currently experiencing a “bloodbath” over the deepening turmoil in the global periphery. As I wrote on Friday, five years since the collapse of Lehman Brothers, we may now find ourselves at the start of a new phase in the global financial crisis. Just when European leaders were boasting about their debt problem finally being “under control”, investors are losing their cool over a Chinese slowdown and the Federal Reserve ‘tapering’ its stimulus program. The fear is that the resultant liquidity crunch and commodity slump will negatively affect the ability of some developing countries to pay back the debts they accrued over the past decade of cheap credit.
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