Feb 22/09. The financial crisis
has moved from Wall Street to all streets, as the economic shock causes
strains and suffering in every part of the world economy.
Among the most significant
developments has been the realization that the most prudent countries –
such as Germany, Japan and China – will suffer as badly as the
spendthrifts, or even worse. Despite the whiff of hubris that wafted
from Berlin when the banks of Britain and America went into meltdown,
Germany's economy contracted by two per cent in the last quarter of
2008, compared with 1.5 per cent for Britain's.
The problem was that the Chinese
and Germans were too thrifty: their countries' growth was reliant on
sales of goods to countries that were borrowing. Now that Americans
can't afford its products, China's exports have collapsed, down 17.5 per
cent in January from a year earlier. -