Oct. 27 (LPAC)--The panicked flight out of "emerging economy" currencies and stock markets is accelerating, fueled by international speculators who are trying to cover their unwinding derivative positions and dollar and yen carry-trade exposures. This has created the prospect of imminent sovereign debt defaults by a number of these countries, which will in turn have a chain reaction effect of significant proportions. As one trader quoted today by Bloomberg admitted, "It's linked to forced selling."

Today's mayhem included sharp drops on the Hong Kong stock exchange (-15%), Philipines (-12%), and Thailand and Hungary (-11% each).

Absent LaRouche's New Bretton Woods, a number of these desperate countries have been driven to the waiting arms of the genocidal International Monetary Fund. The IMF has just agreed to lend Ukraine $16.5 billion; Hungary will get "a substantial financing package" from the IMF; Belarus last week asked them for at least $2 billion; and Pakistan is looking for some $15 billion. All such loans come with devastating "conditionalities" attached.

Standing reality on its head, British Tory mouthpiece Ambrose Evans Pritchard today blames the "emerging market" insolvency for the problems of Europe's banks. Citing data from the Bank for International Settlements, Pritchard reports that three quarters of the total $4.7 trillion in cross-border bank loans that have been extended to Asia, Eastern Europe and South America are held by European banks. For example, Austria's bank exposure to emerging markets is equal to 85% of its GDP, Pritchard frets.