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How to save the world

The world may be returning to a pre-1929 condition of endemic financial instability. Christopher Huhne considers two proposals to bring order to the markets

By Christopher Huhne   February 1999

That old wizard Alan Greenspan seems to have done it again. With a couple of deft interest rate cuts, the US Federal Reserve chairman has spurred Wall Street to bounce back to new highs. The threat of an end to the long Goldilocks boom in the US has been temporarily lifted.

Nevertheless, the underlying problems both for the US and the world economy remain acute. The US stock market is so high, and the wealth thus generated so impressive, that US consumers no longer save at all. They are now borrowing more than they are saving, an almost unprecedented phenomenon…

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