Almost every day there is a new hypothesis on why the economies of southeast Asia suddenly collapsed this year after so many years of stability and expansion. Most of them help explain why problems compounded once the slide began.
Surplus produces inflation, scarcity produces deflation.
Because the dollar is so dominant as the world's key currency, all other central banks in the world must take note of its value in order to stay within the bounds of global commerce and finance. The Japanese yen and the German mark are satellite currencies, important in their realms, but still guided by the dollar. One might suppose the currencies of southeast Asia would look first to the yen for guidance, but because of patterns of trade that have developed in the past 50 years, they have keyed on the dollar. Other countries were getting the same advice from western economists following the experience in Mexico, but only Thailand responded. Predictably, its stock market slowed to a crawl, then began a retreat.