The markets have indeed judged the IMF austerity prescriptions of high taxes and devalued currencies: thumbs-down.

FORBES: Readers Say

The third choice would be to try to inflate the way out, by allowing inflation to rise so governments could pay down debts faster (with inflation-devalued currencies).

FORBES: Markets Pass Through Eye Of The Storm

Having devalued their currencies, the neighbours have become vastly more competitive in export markets.

ECONOMIST: Vietnam

"If you look out five years, we can gain back all the competitiveness Thailand or Indonesia or the Philippines had when their currencies devalued, " says the General Chamber's Tien.

CNN: The Cost of a Pegged Dollar

As central banks print money and increase supply, currencies become devalued.

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As the crisis spread, most of Southeast Asia and Japan saw slumping currencies, devalued stock markets and other asset prices, and a precipitous rise in private debt.

FORBES: China and the Looming Currency Showdown in Seoul

Their currencies have devalued.

ECONOMIST: Dollarisation in Latin America

Both Mexico city and Caracas have become cheaper in recent years, as their countries' currencies have been devalued.

ECONOMIST: LIVING EXPENSES

Indeed, the turmoil is partly fueled by market expectations that Asian currencies pegged to the dollar will be devalued to preserve export competitiveness, given the greenback's strengthening in the past couple of years.

CNN: A QUESTION OF OPENNESS

It was in July last year that Bangkok devalued the baht, setting off a chain reaction that has Southeast Asian currencies in free fall.

CNN: IN FOR A ROUGH RIDE