Clearly, credit-loan growth, which should have been tightening in the face of looming over-supply, was accelerating. 'I was trying to understand what was going on and why the economy continued to build unnecessary skyscrapers,' Mr Duncan said, during an interview in Hong Kong. 'The boom under any reasonable assessment should have slowed down.'

At the time Mr Duncan says he went bearish on the Thai economy, publishing brokerage reports that warned of a potential slowdown ahead, albeit one that in the end would take years longer to play out and be much greater in severity than he anticipated.

But the question marks raised by the experience would dog him for years. He left his banking job in 1996, but returned to Bangkok as a consultant to the International Monetary Fund during May of 1998 - a vantage point from where he could watch non-performing loans explode to 50 per cent. In September of 1998 he moved to Washington to continue his research as an Asian financial sector specialist for the World Bank.

The outcome of his experience is a 262-page book entitled the Dollar Crisis: Causes, Consequences and Cures (John Wiley & Sons), which deals with reasons for the growing frequency of economic bubbles around the world.

The culprit, Mr Duncan says, is the king-sized United States current account deficit (CAD). These annual deficits fuel money-supply growth and an inevitable economic overheating in those countries that enjoy big trade surpluses with America. Although the US trade deficit has been on the radar scope of economists for years, Mr Duncan says most have tended to overlook how those surpluses affect America's trading partners.

Take a case in point. When Japan records a trade surplus with the US, those dollars enter the country's banking system and are re-lent, leading to a dramatic increase in loan growth. To stem the rise of the yen against the dollar, Japan's central bank purchases dollars, and then uses those dollars to buy US Treasuries, thereby financing the US current account deficit. The problem, says Mr Duncan, is that this amounts to a free line of credit to US consumers, without imposing any of the financial discipline that would normally choke off such growing imbalances.

'Everyone recognises that the current-account deficit is a problem, including the US, but the thing that is really unique about this book, and the most valuable thing perhaps, is that it explains how the CAD is creating economic bubbles in all the countries that have a surplus with the US.'

The system leads to painful boom-bust cycles. In the case of Japan, the property and stock-market bubble popped in 1989 - leaving the country in a deflation-plagued quagmire for the past 14 years. At the height of the property bubble, Tokyo's Imperial Gardens were worth more than the entire California real-estate market.

'All countries with trade surpluses are going to be destabilised by their surpluses,' Mr Duncan says. 'These surplus countries turn into bubbles, and like night follows day, these bubbles always pop.'

Mr Duncan is now based in Hong Kong as a senior investment analyst for ABN Amro Asset Management. He joined the company after completing the book and emphasises that the conclusions are his own personal views.

Cast a magnifying glass over any of the Asian economies during the 1990s boom and you'll find much of the same forces at work.

More important for the global economy are the effects of industrial over-investment fuelled by rapid credit expansion. Excess industrial capacity ends up flooding world markets with cheap goods that contribute to global deflation. Pricing weakness tends to 'crowd out' high-cost producers, forcing companies to slash jobs and close factories to compete with the flood of goods from Asia.

Despite the decline in the dollar recently, the US trade deficit has accelerated to US$60 million an hour, or a projected US$525 billion this year.

'It becomes very hard for corporations to make profits, then they fire workers, and then unemployment goes up, which is what we have now with the jobless recovery,' Mr Duncan says. 'There is a danger that these deflationary forces that result from an economic bubble will end up causing job losses and a backlash against free trade which could threaten the global economy.'

The cycle, says Mr Duncan, leads to a catch-22. As America's economy weakens, the trade gap widens. The next bubble economy appears to be China, he says, where new loan growth is averaging 20 per cent a year.

He says the roots of the problem began with the demise of the Bretton Woods agreement in 1973 - a de facto gold standard which ensured the smooth operation of global commerce by preventing large or persistent trade imbalances between countries. In the 20 years preceding the demise of the Bretton Woods System, international reserves rose by 55 per cent. In the 30 years following, global reserves have expanded by 2,000 per cent.

Mr Duncan believes the Fed's low interest-rate policy is only making the current deflationary problems worse. Lower interest rates have reduced credit cost and encouraged consumption, fuelling the current account deficit. Meanwhile, CPI inflation continues to be very low, meaning US corporates are not likely to be back on the path to profits any time soon.

Mr Duncan believes serious policy changes to address these problems are unlikely - until a full-fledged economic crisis forces governments into action.

One risk is that if governments around the world continue to attempt to reflate by expanding the money supply, they could end up overshooting on inflation targets, resulting in hyper-inflation.

Mr Duncan says investors would be well advised to batten down the hatches ahead of a potential crisis in dollar confidence. While equities could perform well as the global money supply increases, he says a surer bet are precious metals such as gold, and hard-assets such as real estate in markets that have not seen dramatic price jumps already.