In ordinary commerce, prices adjust and markets equilibrate. In global money markets, erratic and damaging overshooting is the norm.
Exhibit A is, of course, the Asian crisis.
But that system, while in need of overhaul, did produce exceptional growth for two decades. The more important cause of the Asian crisis is the sudden exposure of these nations to the speculative whims of unregulated financial capital. However, when these economies became targets for global financial speculation, they were abruptly exposed to forces beyond their control. Hot money poured in, seeking supernormal returns. When the hot money resulted in overbuilding followed by falling expectations, the money poured out just as quickly.