Since the summer of 2008 the world has experienced the greatest destruction of wealth – paper losses measured in the trillions of dollars – in its history. No industry in the world has been left untouched. The financial powerhouses of Bear Stearns and Lehman Brothers have gone bankrupt and mortgage giants Fannie Mae and Freddie Mac had to be bailed out. Attempts by the US government to save industries led to an increased budget deficit, making some experts predict that the global power epicenter might shift away from the US before the crisis ends. On the other hand, it has become clear that Asian countries need to restructure their domestic economies to encourage consumption. They cannot continue to rely on credit-fueled American consumption to promote growth. Consumer confidence remains low with fears of a double-dip or an anemic recovery being voiced daily. Some poor countries, insulated from foreign finance, suffered from reductions in tourism, remittances and foreign aid. What began as a local problem of excess credit in the United States is likely has affected every member of the global community. All crises in the twentieth century have had world-wide consequences but the crisis of 2008 will go down in history as the first full-blown global crisis.

Still Hanging On

A slow drop in the dollar’s value may be enough to discourage market imbalances
Satoshi Kambayashi
September 24, 2007

Global Risk of US Credit Crisis – Part I

The US responds too little, too late, to the credit crisis
David Dapice
September 21, 2007

Global Risk of US Credit Crisis – Part II

Lax US regulation of risky financial instruments could break the global bank
David Crane
September 24, 2007

Amid the Mortgage Defaults, America's Day of Reckoning

Predictable consequences arise for the global economy and Americans who overextended themselves
Joseph E. Stiglitz
August 22, 2007

“Fed, We Have a Problem”

Wall Street clamors for lowering the interest rate, but that could unsettle major US creditors, including China
Jeffrey Garten
September 12, 2007

US Mortgage Crisis Hits Pacific Rim Markets

Mortgage lenders and securities dealers ignored the fact that US consumers bought homes beyond their means
Carter Dougherty
August 7, 2007

Why Dollar Hegemony Is Unhealthy

The world’s dangerous dependence on the US dollar risks hurting all
Thomas I. Palley
June 20, 2006