The Bill from the China Shop
The world economy has been warped since the 1997 Asian crisis by excessive saving in China and developing Asia, as well as in Japan and north-central Europe. Unsophisticated economic policies and primitive financial systems notably in China, but also in other parts of Asia have resulted in the global economy now depending on unprecedented current account deficits and the willingness of America, Britain, Australia, and increasingly Mediterranean Europe, to import goods and capital. The Bill from the China Shop examines the financial crisis.
Due to the 1997 Asian Crisis:
The United States led a huge build-up of domestic abuse
Household debt is soaring relative to income
Easy money policies inevitably lead to over-stimulation and the risk of a slump
Major interest rate increases are now needed to prevent inflation.