It is now beyond all doubt. The global patient is seriously ill. Many experts say the incubation period has been a long time, a matter of months if not years. What has caused the illness? Part of the blame must lie at the door of private individuals as well as banks and corporations. Self-indulgent orgies of irresponsible lending, borrowing and speculative property-dealing have severely weakened the immune system of the global economy.
What is the cure? Financial leaders such as Ben Bernanke, Chairman of the Federal Reserve Bank and Jean-Claude Trichet, Chairman of the European Central Bank and political leaders such as Gordon Brown, the UK premier are attempting to cure the patient, but without much success so far.
So the disease continues to spread from the banks to the High Street. And not only spread, but also mutate. First, there were fears for the patient's temperature: just after a few months the pulse rate for oil quickened beyond measure, to reach the unprecedented height of $150 just a few months ago. World commodity prices suffered similar severe bouts of inflation.
Now the illness has changed tack yet again: the most recent prognosis is galloping deflation and recession as demand falls everywhere. Central bankers prescribe increasingly lower rates of interest, and governments look for ways to stimulate the patient's health through swingeing tax cuts and exhortations to spend more. But all these remedies come with a health warning: avoid reckless debt and unsecured loans at all costs.
Will the medicine work? And how long will the patient take to get well again? The best medical professionals humbly acknowledge that the treatments they offer are only catalysts, however, decisive, not the cure themselves. Much depends on the patient's frame of mind and emotional state.
The vital ingredient is a generous dose of positive thinking. Widespread optimism is the indispenasable placebo that will ultimately halt a current vicious downward spiral for the giant that is the global economy.
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