Earlier this week I wrote a detailed post, a Possible Currency crisis happening, particularly in Eastern Europe.

Bloomberg is now reporting Plunging Currencies in Eastern Europe.

This is after the IMF stepped in.

Since the end of August, the forint has fallen 16 percent against the Swiss franc, the currency of choice for Hungarian homebuyers, and more than 8 percent versus the euro. Foreign- currency loans make up 62 percent of all household debt in the country, up from 33 percent three years ago.

Romania's leu dropped more than 14 percent against the dollar and 3.2 percent against the euro. Poland's zloty declined more than 17 percent against the dollar and 6.8 percent versus the euro, and Ukraine's hryvnia plunged 22 percent to the dollar and 11.5 percent to the euro.

That's even after a boost this week from an International Monetary Fund emergency loan program for emerging markets and the U.S. Federal Reserve's decision to pump as much as $120 billion into Brazil, Mexico, South Korea and Singapore. The Fed said yesterday that it aims to ``mitigate the spread of difficulties in obtaining U.S. dollar funding.''

There is something called Contagion, a little understood global economic interaction effect, where one local economic collapse reverberates and causes other nation's economies to follow suit.

So, plunging currencies plus a cut off of loans in world reserve currencies to these emerging Eastern European economies is not a good thing.