The United States And Japan Are Crying Out For The World Economy.

The surging waves of the US housing crisis in the global stock market once again remind people that the globalization of the world can not be completely decoupled.

In recent days, the three major economies of the United States, Europe and Japan have issued a warning of worsening economic conditions.

Analysts pointed out that with the gradual emergence of the impact of the subprime crisis on the real economy, these traditional world economic "locomotives" have entered the stage of "further deceleration" of the economy, which is bound to bring more challenges and risks to other economies in the world.

Bernanke makes pessimistic economic views

On the 15 day testifying in the US Congress, Bernanke, chairman of the Federal Reserve, changed the optimism in the statement at the end of last month's monetary policy conference, and admitted that the economic growth was facing "great" downside risks.

In the semi annual economic forecast report submitted to Congress, the Fed said: "the Federal Open Market Committee (FOMC) believes that the prospects for economic growth are faced with great uncertainty and future risks are more downward."

In a statement after the 25 meeting of interest rate conference last month, the Fed also believes that the downside risks of the US economy still exist, but are "easing".

In issuing testimony to Congress, Bernanke also said that the US economy still faces many difficulties, such as financial market turbulence, falling house prices and soaring oil and grain prices, which pose a "severe challenge" to the Fed's decision making.

Although the Fed raised its forecast for 2008's annual economic growth, Bernanke said officials expect growth to be slightly below the potential level.

He expects the housing market to remain weak, while business and consumer spending will be suppressed.

In response to the recent market volatility, Bernanke said that maintaining the stable operation of the financial market is still the primary task of the Federal Reserve. The Federal Reserve is closely monitoring the operation of Fannie Mae and Freddie Mac.

The two major housing mortgage financing institutions have been in trouble, and the Federal Reserve and the Ministry of finance have announced emergency relief measures.

Compared with the deterioration of the US economic outlook, Japan's economy has also seen signs of cooling down.

On the 16 day, the Bank of Japan lowered its forecast for economic growth in its monthly economic report for the first time in three months.

The day before, the Bank of Japan has just announced that its growth forecast for this fiscal year will be substantially reduced.

According to the central bank's forecast, the average growth rate of Japanese economy in fiscal year 2008 is 1.2%, which is 0.3 percentage points lower than the previous forecast.

Considering the increasing risk of economic growth, the central bank also decided to keep the interbank lending rate at 0.5% level unchanged.

Shirakawa Gataaki, President of the Bank of Japan, said on 15 June that the trend of Japan's economic slowdown has become more apparent due to the impact of rising prices of raw materials such as energy.

He said the continued downturn in trade will lead to a further slowdown in the Japanese economy.

He also said that the recovery of the US economy may be postponed.

In the latest economic monthly report, the central bank once again announced the downgrading of the economic assessment for the first time in April.

The central bank forecasts that economic growth will also decline, mainly because of rising energy prices and restraining expenditure.

The shadow of Europe's recession is spreading.

In the three largest economies, the euro zone economy has always been considered optimistic.

However, in recent times, the situation in Europe has also continued to deteriorate, and the shadow of economic recession has begun to spread in the continent.

Denmark became the first European Union to fall into a technical recession earlier this month.

European economies are facing problems such as inflationary pressures, high oil prices, strong exchange rates, weak global economic growth and tight credit.

After the recent housing boom, Denmark, Spain, the United Kingdom and Ireland are also facing a downward trend in housing prices after the US, but only two years later than the United States.

This week, more bad economic news came from Europe.

On Tuesday, the Spanish construction group Martinsa-Fadesa filed for bankruptcy protection, becoming the first victim of the European real estate bubble burst, and Spain's largest bankruptcy ever.

On the same day, the euro rose to a record high of 1.60 against the dollar, while Germany's investor confidence in Europe's largest economy fell to its lowest level since the recession in early 1990s.

Germany is one of the few largest economies in Europe and the developed countries with significant growth.

Analysts pointed out that Europe's risk of falling into recession is growing. It shows that the economic downturn started in the United States last year is spreading to other regions, dispelled the hope that the global economic interaction may have been reduced enough to make the rest of the world survive the downturn in the US economy.

With the three traditional "locomotive" in trouble, the outlook for the world economy is also more uncertain.

Global investors' confidence in the world economy has dropped to the bottom since last November, according to a new survey released by Bloomberg this week.

In an interview with our reporter, Weiss, the chief economist of standard and poor's, said that although the United States was no longer the only engine of the world economy, the link between the US economy and the world economy was still very close.

At the same time, another major driving force of the world economic tradition is also facing the same problem in Europe: the housing bubble burst and oil prices are soaring.

Although Japan does not have a housing bubble, it faces a record oil price problem. Therefore, even if the impact of the US economic slowdown is not considered, the European and Japanese economies will slow down.

But O'neal, head of global economic research at Goldman Sachs, is relatively optimistic.

He said that the US economy accounts for about GDP30% of the world, so when the US economy suffers from "colds", other economies will be more or less affected.

But the BRIC's strong domestic demand is enough to offset the sharp drop in US domestic consumption demand.

He predicts that the BRICs, which currently accounts for the world's GDP16%, will help the global economy maintain a 3% to 4% growth rate.