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July 26, 2006
Economics: Leb Land and Israeli bloody mindedness
Earlier I noted some thoughts on the economic impact. To be developed further, FT provides some more concrete information with numbers on Leb Land Central Bank liquidity.
Rather clearly they are looking at a currency crisis if this runs through August and into September, which seems likely. (Of course this is not inevitable, large gifts by Gulf powers flush with liquidity can help stave off disaster).
The question becomes whether there is contagion for the other weak MENA currencies. Egyptian, Turkish and other currencies could take some serious hits. Possible to avoid, but there is going to be a lot of downdrafts to evade in order to do so.
Posted by The Lounsbury at July 26, 2006 06:42 PM
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Economics
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