GLOBALIZATION AND MONGOLIA’S NOMADS. This article in the Wall Street Journal tells about how the financial crisis in the West is having a dramatic effect on nomadic herders in Mongolia. With the recession in the West, the demand for cashmere has dropped, especially demand in the United States. The price of cashmere in Mongolia has fallen by over 33%. Banks had been making loans of a classic kind to herders to even out their incomes through the year. Herders earn income only twice a year: wool sales in the spring and sales of skins and meat in the fall. Banks had overlent (there was apparently something of a bubble in cashmere prices) with some of the loans being used for conspicuous consumption, such as solar panels to provide electricity for tents. Even worse for the banks, the ownership records for animals are imperfect and the animals were often used for collateral.

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