Monday, February 16, 2009

Boule de neige effect, Eastern Europe and the catastrophe

The catastrophe is again starting from the wild East. In fact, in a way, it's wild. After decades of limited consumption and envious look at the pictures of the glossy magazines brought illegally, they wanted to spend, spend, spend. As they saw, after "liberations" on tvs. And some of them wanted and succeeded in some cases to change overnight their old, local cars with glamorous international brands, the most expensive, if possible. I mentioned the car, because it is one of the most appreciated social value in many of the Eastern European countries. The banks, most part, branches of international institutions, allowed them to get loans over loans, to pay a huge amount of loans far beyond their financial capacity. They weren't exploited, but they entered by their own and single will in this game, as the local economic knowledge was and is extremely limited and unable to make long-term projections - more than for an electoral cycle. They offered cheep labor force, while those with high education and knowledge left. They are longing now the old good times of protectionism, but impossible to decide staying out of the game, and renouncing to newly acquired advantages of desperately getting huge advantages out of nothing and without too much effort.

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