Since the summer of 2008 the world has experienced the greatest destruction of wealth – paper losses measured in the trillions of dollars – in its history. No industry in the world has been left untouched. The financial powerhouses of Bear Stearns and Lehman Brothers have gone bankrupt and mortgage giants Fannie Mae and Freddie Mac had to be bailed out. Attempts by the US government to save industries led to an increased budget deficit, making some experts predict that the global power epicenter might shift away from the US before the crisis ends. On the other hand, it has become clear that Asian countries need to restructure their domestic economies to encourage consumption. They cannot continue to rely on credit-fueled American consumption to promote growth. Consumer confidence remains low with fears of a double-dip or an anemic recovery being voiced daily. Some poor countries, insulated from foreign finance, suffered from reductions in tourism, remittances and foreign aid. What began as a local problem of excess credit in the United States is likely has affected every member of the global community. All crises in the twentieth century have had world-wide consequences but the crisis of 2008 will go down in history as the first full-blown global crisis.

Beyond Debt Woes, A Wider Crisis of Globalization?

Quick fixes lead to imbalances, unsustainable systems and loss of trust
Peter Apps
August 8, 2011

A Global Laughingstock, US Politicking Threatens Economy

Unnecessary squabbling over debt raises questions on US leadership and exposes deeper problems
Philip Bowring
August 2, 2011

With US on the Brink of Default, Eyes are on Rating Agencies

Despite credit-rating agencies' past failures and suspicion of collusion, investors have nowhere to turn
David Dapice
July 26, 2011

Employment Versus Debt

US Congress could be targeting the wrong priority
Nayan Chanda
July 26, 2011

China Urges US to Protect Creditors by Raising Debt

The US toys with debt default and global calamity
Bettina Wassener, Matthew Saltmarsh
July 15, 2011

The Next Domino? Italy Suffers from Euro-Zone Contagion Fears

Global bond markets unnerved by unending debt
Carsten Volkery
July 13, 2011

The Eurozone Heads for Breakup

Saver nations had little policy control over the spendthrifts
Nouriel Roubini
June 16, 2011