We are so preoccupied in this country with the impact of the credit crunch on house prices, retail spending and jobs that we tend not to notice its geopolitical impact.

Anthony Hilton, thisismoney.co.uk – 30 January 2009

But this week we received a timely reminder when Russia’s Vladimir Putin and China’s premier Wen Jiabao both delivered none-too-tactful rebukes to the West for getting into the mess in the first place, together with a timely reminder that when things eventually return to normal, that normal will be different.

In particular, the West should not assume that countries in surplus will not go on blindly buying American debt to allow it to continue to run massive budget deficits that suck up the bulk of the world’s savings.

It is worth remembering that the credit crunch did not just happen, but was born of the economic imbalances created by the US budget and trade deficits – and provided the glut of cheap capital that allowed bankers to drop their lending standards so disastrously. Full Article