David McWilliams: we may be on verge of a global financial crisis

A rising dollar threatens emerging markets with huge debts incurred in the US currency

US president Donald Trump and China’s president Xi Jinping in Beijing last November. Since Trump announced his trade war with China, the Chinese currency has lost 7% of its value. Photograph: Artyom Ivanov/Getty Images

US president Donald Trump and China’s president Xi Jinping in Beijing last November. Since Trump announced his trade war with China, the Chinese currency has lost 7% of its value. Photograph: Artyom Ivanov/Getty Images

Twenty years ago this week Russia devalued, defaulted and suffered a catastrophic bank run. The chaos opened the door for Vladimir Putin, who emerged from the financial bedlam to drag Russia back from the brink.

In mid-August 1998, people in Moscow could not understand how the small crisis in Thailand of 1997 could engulf a country such as Russia that did hardly any trade with faraway Thailand. How could these countries be related?

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