Dec 3, 2004

The Promised Land

"Fourth, emerging economies can bridge to, but cannot substitute for, the containment and correction of financial imbalances in the US. The wellbeing of the global economy requires co-ordinated policy measures in several big industrial and emerging countries aimed at facilitating an orderly US current account adjustment concurrent with a pick-up in aggregate demand elsewhere." - Pimco's Mohammed El-Erian

He paints an excellent picture of the positive things going on around the world that can more than offset the problems with the core economies. The problem is really one of timing. The core economies of Japan, Europe, the U.S. and China seem more intent on bickering and finger pointing than on actually making positive changes within' their own countries.

With the dollar having begun its descent while interest rates in the U.S. float higher it is probably too late for changes to be made. Sometimes it takes a catastrophe or near catastrophe to spur real policy changes and that is what will ultimately unwind the U.S. debt problem.

No comments:

Post a Comment