My comment: Bingo, Mr. Volcker ! With all my respect, you got it ! Let us hope that American economists finally understand that the decoupling theory works in both ways.
Since many years ago it was told that "when US gets a cold, the rest of the world suffers a pneumonia". That is not true any longer. But it is true nowadays, and in the future that we can foresee, that "when US economy gets a pneumonia, the rest of the world suffers a cold". But it also works in the opposite way. Also, nowadays it is true that "when a major economy such as Europe or Japan or China or any other suffers a pneumonia, USA suffers a cold". And even worse, "when Europe, Japan, China, and all economies suffer a cold together, US pneumonia becomes much worse". When US authorities cutted access to US dollars in July and August, I wrote that it was bad for all economies, but, it was bad specially for US economy. Along 2007 and until July 2008 I wrote a short dialogue between two professors that I watched and hear. One told "2008 will be known as the year when the rest of the world saved US economy". A second one added "if Americans allow us to save them". Unfortunately, in July, American authorities decided (unintended, of course) to spread the credit abroad. As expected by many, this time the global economy did not behave as in the past. To spread it abroad did not moderate US crisis. This time, the consequence was that the US crisis became worse. It will happen like that hereinafter, and the worse consequence is that others cannot help the worse victim because they are sick too. Would be useful to learn that lesson next time US economic authorities decide to deepen US protectionisms, to raise tariffs, etc.. The global economy is not a zero-sum game. On the contrary, success of others push your own success. Selfishness and selflessness, its balance determines success hereinafter. Peace and best wishes. Xi http://www.bloomberg.com/apps/news?pid=20601087&sid=aLX6su8A8GZA&refer=home Feb. 20 (Bloomberg) -- The U.S. economy will suffer from the effects of the global financial crisis for “a long time” as a slowdown in demand spreads to other countries, former Federal Reserve Chairman Paul Volcker said. “We’re in the middle of a kind of massive economic crisis,” Volcker, who heads President Barack Obama’s Economic Recovery Advisory Board, said today at a Columbia University conference in New York. “We’re going to hear the reverberations about this for a long time.” Volcker characterized the downturn that started in December 2007 as “not like a typical recession in the U.S. or elsewhere.” He also cautioned that U.S. government and central bank efforts to revive credit markets should only be temporary to alleviate the risk of inflation. Volcker said he is “shocked” by the international reach of the slowdown. “The rest of the world has not held up,” making it harder for the U.S. to rely on strong export growth to emerge from its economic slump, he said. “Industrial production in most countries is going down faster than in the United States,” Volcker said. The U.S. economy will contract 2 percent this year, making it the deepest annual slump since 1946, according to a Bloomberg News survey of economists taken this month. Gross domestic product shrank at a 3.8 percent annual pace in the last three months of 2008, the Commerce Department said in January. Volcker also discussed rising prices, saying even “a little inflation is bad.” The cost of living in the U.S. rose last month for the first time in six months as the consumer price index rose 0.3 percent, the Labor Department said today in Washington. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
