It was a momentous decision. The U.S. economy and the global financial system seemed to be coming to a precipitous end.
The day before Money Morning published my lengthy analysis and recommendation, The New York Times published an editorial by the newly anointed economics Nobel laureate Paul Krugman, entitled "The Widening Gyre." Krugman in that editorial criticized those of us who believed emerging economies would decouple from the financial melee that was wrought by the over-leveraged and imbalanced developed economies.
"The really shocking thing, however, is the way the crisis is spreading to emerging markets - countries like Russia, Korea and Brazil," he wrote. And he derided the notion of "the supposed ability of emerging market economies to keep growing even if the United States fell into recession.... Now the emerging markets are in big trouble."