Over the past decade, Chinese trade revenues, savings and purchases of US debt increased. Low interest rates encouraged US consumers to spend and housing prices soared. But such imbalances could not be sustained and financial instruments containing mortgages for homes that have lost their value, have proven toxic for the world. Economists and central bankers are still struggling to find a way out of the subprime mortgage crisis. If Japan’s lost decade offers lessons, then deflation must be averted at all costs if there is to be hope for a recovery.. But for the long-run, one magical phrase emerges from experts and that’s “stricter regulations for the banking industry.” Once governments succeed in restoring consumer and investor confidence, they should focus on designing regulations that encourage responsibility and a long-term outlook. Furthermore, policymakers have to recognize the need for global oversight of the banking industry, either by strengthening existing institutions or by creating new international authorities. The timing of the rescue is uncertain, and the certainty of its efficacy remains in question. To put the matter in historical perspective, there is still no consensus on whether government spending policies of Franklin D. Roosevelt or increased demand for goods created by Second World War pulled the United States out of the Great Depression. One certainty for this crisis: there are no localized solutions for a problem that extends throughout the world.

Ahmadinejad’s Sugar Daddy

For US, sugar and ethanol competition is more frightening than a nuclear Iran
Gal Luft
June 10, 2010

As Growth in US Slows, Wal-Mart Puts More Emphasis on Foreign Stores

Consumers in global markets could rescue the global economy
Ylan Q. Mui
June 10, 2010

Unless Two Imbalances Can Be Fixed, Two New Crises Will Follow This One

Nations can’t just export their way out of global recession
Irwin Stelzer
June 8, 2010

Wanted: Competent Leaders With Vision To Tackle Global Crises

Markets spooked by leaders’ lack of courage before great challenges
Jeffrey E. Garten
June 3, 2010

When Banks Don't Trust Banks

Seeking safety, banks and investors are ready to move money quickly
Pierre Paulden
June 3, 2010

India's Medical Tourism Industry

Health tourism could rival IT in boosting the economy
Neeta Lal
June 2, 2010

Entrepreneurs Wary of China Currency

US businesses that import materials or goods from China prepare for higher costs
Emily Maltby
May 26, 2010