"underpinnings were flawed and as a consequence, the virtuous cycle has ended. It is now in the process of reversing and becoming a vicious downward economic spiral.
"These two strategies have worked in harmony because they fed off each other, each reinforcing the other. However, today the realities of debt saturation have brought the virtuous spiral to an end.
"One of the two global strategies enabled the Asian Tigers to emerge and grow to the extent that they are now the manufacturing and potentially future economic engine of the world.
"The other allowed the US to live far beyond its means with massive fiscal deficits, chronic trade imbalances and more recently, current account imbalances. The US during this period has gone from being the richest country on the face of the globe to the biggest debtor nation in the world.
"First we need to explore each strategy, how they worked symbiotically, what has changed and then why the virtuous cycle is now accelerating into a vicious downward spiral."
global climate change
"Caution: It is vitally important not to make connections. When you see pictures of rubble like this week’s shots from Joplin, Mo., you should not wonder: Is this somehow related to the tornado outbreak three weeks ago in Tuscaloosa, Ala., or the enormous outbreak a couple of weeks before that (which, together, comprised the most active April for tornadoes in U.S. history). No, that doesn’t mean a thing.
"It is far better to think of these as isolated, unpredictable, discrete events. It is not advisable to try to connect them in your mind with, say, the fires burning across Texas — fires that have burned more of America at this point this year than any wildfires have in previous years. Texas, and adjoining parts of Oklahoma and New Mexico, are drier than they’ve ever been — the drought is worse than that of the Dust Bowl. But do not wonder if they’re somehow connected.
"If you did wonder, you see, you would also have to wonder about whether this year’s record snowfalls and rainfalls across the Midwest — resulting in record flooding along the Mississippi — could somehow be related. And then you might find your thoughts wandering to, oh, global warming, and to the fact that climatologists have been predicting for years that as we flood the atmosphere with carbon we will also start both drying and flooding the planet, since warm air holds more water vapor than cold air.
"It’s far smarter to repeat to yourself the comforting mantra that no single weather event can ever be directly tied to climate change. There have been tornadoes before, and floods — that’s the important thing. Just be careful to make sure you don’t let yourself wonder why all these record-breaking events are happening in such proximity — that is, why there have been unprecedented megafloods in Australia, New Zealand and Pakistan in the past year. Why it’s just now that the Arctic has melted for the first time in thousands of years. No, better to focus on the immediate casualties, watch the videotape from the store cameras as the shelves are blown over. Look at the news anchorman standing in his waders in the rising river as the water approaches his chest."