By K.T. Arasu
CHICAGO, Dec 14 (Reuters) - A decade ago, at the height of the Asian financial crisis, I walked into a currency exchange office in Jakarta carrying a large brown bag stuffed with money. I walked out with but a few hundred U.S. dollars.
I was converting millions of rupiah, the Indonesian currency, before leaving Jakarta for the United States.
At 10,000 to the dollar, I got less than a third of what I would have received just a few weeks earlier, when the rate was 3,000 to the dollar.
In the intervening years, the only time when the value of a currency has been of concern is when my family travels on vacation.
But the long-dormant feelings of that time of despair in Indonesia during the 1997/98 Asian financial crisis are being rekindled by the economic troubles in the United States.
Even though I seem to be on the right side of the currency fence at the moment -- the value of the U.S. dollar has been rising against other major currencies -- the daily turmoil in the stock market, news of people losing their jobs and rising food prices remind me of that bleak period.
It is a sinking feeling when your money loses 30 percent of its value in a flash -- regardless of whether stock losses or exchange fluctuations are to blame. And, in both cases, the circumstances are well beyond my control, and maybe even beyond the control of the government.
Ten years ago, I was a Reuters correspondent in Jakarta, the bustling capital of Indonesia, which was hit so hard by the crisis it had to turn to the International Monetary Fund for a bailout.
That act of acquiescence was immortalized in a widely published photograph of the once mighty President Suharto bending over a low desk to sign the bailout documents, watched over by the then IMF Director-General Michel Camdessus.
In hindsight, that was the first nail in the political coffin of the iron-fisted Suharto, who resigned in 1998 after the economy collapsed and the people revolted.
The Asian crisis was a challenging time for people in that region. Sparked by the sharp depreciation of the Thai baht following speculative attacks, the ensuing turbulence spread through Southeast Asia and beyond.
It was a period of slumping stock markets, rising interest rates, and job losses as many businesses collapsed.
In many ways, it was similar to what is happening now in the United States.
The stock market, as measured by the Dow Jones industrial average, has tumbled about 40 percent from its peak above 14,000 points hit in October 2007.
The jobless rate in the United States rose to 6.7 percent in November, the highest since 1993, which adds up to 10.3 million Americans out of work.
For me, the drastic fall in the rupiah was complicated by the fact that the rent on my house was paid in U.S. dollars.
It may sound strange, but Indonesians renting out homes to expatriates like myself usually wanted to be paid in U.S. dollars. They probably saw the economic crisis coming and did not seem to put their faith in the rupiah.
And each time my wife and daughter made the short hop home to Malaysia, the fare was paid in dollars.
"The problem began with financial intermediaries -- institutions whose liabilities were perceived as having an implicit government guarantee, but were essentially unregulated," economist Paul Krugman wrote in January 1998.
The excessive risky lending of these institutions created inflation -- not of goods but of asset prices, Krugman wrote.
"The overpricing of assets was sustained in part by a sort of circular process, in which the proliferation of risky lending drove up the prices of risky assets."
Again it is risky lending, this time by lenders to American home buyers, that lies at the heart of the financial crisis in the United States.
Nations hit by the Asian crisis took several years to get back on their feet, and it looks like there's a long road ahead before things get better in the United States. (Reporting by K.T. Arasu; Editing by Eddie Evans)