The ongoing currency crisis in Asia has very broad parallels to the European currency crisis in 1992/1993. However, this time around it appears that Europe is the only place to hide.
Since July, a series of Asian currencies has been forced to devalue, as speculators progressively target one after another.
The crisis has already spread throughout Asia. But it also has major implications for the rest of the world, as the developed countries are affected through global links via trade and the financial markets.
Already Thailand, Malaysia, Indonesia and Taiwan have been forced to re-value. In others interest rates have risen rapidly in a bid to fend off the speculators. The spreading of the contagion to Korea has further emphasised the problem. And there is a widespread belief that the structural difficulties facing South Korea mean there is no short-term solution on the horizon.
There is also a possibility that if the decline in the Korean won is not halted it could feed through to the Chinese yuan. In 1996, Korea made up a staggering $5 billion (£3.3 billion) of China's total trade deficit of $12.3 billion. Many investors now fear that if the yuan was to be devalued it would have global implications.
One major difference with the European crisis is that the Asian turmoil has spread further. Speculators have been targeting currencies as far afield as Latin America and even some European economies.
The Latin American currency which has been most affected is the Brazilian real. However, the Government quickly produced a fiscal package - the Real Plan - which impressed the markets and many now believe the currency can hold. They point out that President Cardoso is prepared to go for price stability and a strong currency at the expense of economic growth.
The Mexican peso has also come under severe pressure in recent weeks and as a result interest rates have risen significantly.
In Europe, the Greek drachma has been coming under some pressure and the Czech currency is also facing selling. If this continues, the core European economies may soon be affected, particularly given the exposure to Eastern Europe. So far the Polish zloty has held reasonably firm, but with pressure already building on the Czech koruna it may only be a matter of time.
The koruna already devalued in May, but structural reforms have been slow in coming. Dissent among the government's two major coalition partners - the Christian Democratic Union and the Civil Democratic Alliance - has not bolstered many investors' hopes.
Apart from the impact on Asia and developing economies there has been a knock-on effect on the major developed economies. The main route has been through the US's high exposure to the Japanese economy - its largest trading partner. About 23 per cent of US trade is with the region compared with 40 per cent for Japan and 10 per cent for Europe.
The US has also been hit by the crisis in its neighbour, Latin America, with which it has significant trading links.
This has delayed expected interest-rate increases in the US. While in Britain and Germany, less exposed to the regions in crisis, sterling and the deutschmark have strengthened against both the dollar and the yen.
The European currencies have also benefited from massive currency flows, as investors quit their positions in Far Eastern and emerging markets and banked their money in the so-called "safe haven" currencies of Germany, Switzerland and Britain.
Sterling has also benefited from recent rate rises there. The markets now appear to believe that British interest rates are heading towards 7.5-8 per cent. In addition, many dealers now believe that the Bank of England is less focused on getting the pound to lower levels. This view was first highlighted by the governor, Eddie George's comments earlier this year, that the currency was probably overvalued. The Bank later forecast a declining sterling but recently it has altered this forecast and it is now forecasting a decline at a much slower rate.
Nevertheless, it is interesting that the former chancellor Kenneth Clarke warned recently in Dublin that sterling could devalue quite rapidly over the first months of next year.
Europe can never remain isolated from developments in US markets and equity markets in particular have suffered as confidence ebbs and flows in the Asian markets.
This week's collapse of Yamaichi Securities did nothing to bolster sentiment, although the cataclysmic fall-out that many predicted has once again failed to materialise.
However, many analysts are already looking optimistically to the end of the crisis. They point out that the US is still the economy with the strongest growth in domestic demand and that it should be able to shrug off the effects of the Asian crisis.
However the far-reaching impact of the latest events in the Asian economies shows the extent of global economic connections, and how events in one part of the world increasingly knock on to others. With financial markets becoming increasingly interconnected and trade flows growing, the extent of international economic interdependence is rising and policy-makers in the West will continue to look nervously Eastward for some time.
