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.

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Countries exporting, while shying away from importing, won't reduce global debt
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US Leapfrogs Sluggish EU on Financial Reform

The US sets pace on financial reform while Europe dithers
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Forget India, Outsource to Arkansas

With low labor costs, small-town USA competes for high-tech jobs
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Reverse Outsourcing

China plans an industrial park in the heart of France
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Germany's Export Boom Has Trade Partners Stewing

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Armin Mahler, Christian Reiermann, Wolfgang Reuter, Janko Tietz
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Ahmadinejad’s Sugar Daddy

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