穆罕默德·埃尔 - 埃利安

你试着说一组明亮的高中学生，想什么样的世界当前状态意味着他们和他们应该做些什么呢？我很感谢上周已经这样做了：我最终争取到一些明天的领导人是如何思考的世界里，他们将继承的见解。

我的演讲分为三个部分。谈话，随后，双方在会谈，此后，范围更广，当然，更有趣。

首先，我们试图建立一个框架，发现头条新闻，许多青少年觉得麻烦，可以理解之间的共同联系。不幸的是，它是一个相当长的清单，包括太少工作的指标，过多的债务，日益严重的社会紧张局势，争吵和无效的政治家，更普遍的是，从某种意义上说，美国正在失去活力时，一次世界其他一些地方日益强大和更难以预料。

为了确定这些链接我们谈到为什么和怎样的信心正在削弱美国的能力，以实现其长期繁荣，机会和社会公正的承诺。然后，我们追溯到破坏体制的失败，在私营和公共部门的投资不足，在美国的未来，多年的债务动态和基本的全球重新调整的现实。

我们的第二个挑战是要问这种状况是否是可逆的。答案显然是肯定的，但它会采取一个重大的，全面的，持续的努力去改变一些事情，做别人好得多。这只会发生，首先，如果有更好的分担责任意识，第二，我们选出的代表，克服他们倾向斗嘴，而是收敛在一个共同的愿景和目的。

第三，最困难的挑战是，这一切都为这些有才华的学生进行辩论和追求转化为行动项目。是的，他们特别幸运，在他们的教育使他们以强烈的学者，深厚的教育传统和良好的社会意识，但他们欠它自身，家庭和社会超越。

某些项目是很容易传达，如继续教育的重要性。试想，根据作业报告上周五公布，与低于高中学历者的失业率在12月份增长13.1％，比全国平均水平的8.3％，只有4.2％具有本科以上学历者。

求知欲和敏捷性的重要性和好处，也随时可转让。他们很容易被强化了的故事，今天的许多产品的发明者，青少年认为不可或缺的。

其他潜在的“做”是同样重要的，如保持开放的态度，关键的是，在全球和谦虚的态度，这样做的。我们都应该更愿意借鉴其他世界各地，包括那些历来被视为一个例子，“发展”。，认为欧洲领导人如何可以幸免其公民相当有点痛了，他们不敢妄言驳回欧洲目前的危机和那些经验丰富的新兴经济体在20世纪80年代，90年代和21世纪初之间的相似之处。

对这些问题进行了精彩的互动。他们给我的感觉，尽管是局部的和不完善的，如何明亮，高成就的学生可以（而且应该）在世界上的重大差异，因为他们爬上他们的教育，专业和成熟度曲线。

我们老一辈也有重要的教训。

我们不应低估的程度，这组在“系​​统”提供的能力失去信任的风险。这些学生的失望会少与系统本身做更多的事情要做，我们的后代是如何运行它已经结束了。

如果我的经验是任何迹象显示，这是错误地认为，美国的青年权利驱动。相反，年轻人正在寻求一个系统，使，结合他们的才华和抱负的机会，可以恢复美国的竞争力，信心和公平感。

我们还应该设法了解青年的社会运动在世界各地，如在美国和英国占据在西班牙Indignados，示威者在以色列更出现，当然，那些发动阿拉伯起义世界。一些大人错误地看作“只是噪音，”很多人看到合法的和急需的催化剂，提高认识，推动全国辩论和影响更好的结果。

我们更应强调改善收入和财富分配的重要性。现在有越来越多的人如何庞大且不断增长的不平等差距削弱了集体的福祉1更好的感受。

这不仅是社会公正。自我利益，也是在这里打球，即使是世界上最富有的。使用住房的比喻，它是很难在日益恶化的邻里改善家庭。

最后，我们不应低估的年轻人抵抗被动接受的预测表明，首次在很长一段时间，他们这一代，当然是结束了比他们的父母关闭。他们不希望这种区别。此外，很多人觉得他们能 - 确实必须 - 证明预测是错误的。

是我们有很多值得学习的高中生认为对当今世界和明日。事实上，今天的政治话语，而功能失调会获得那些还太年轻，投票的见解和直觉。

我从来没有去过达沃斯，尽管多年来许多人劝我去尝试。不要误会我的意思。我明白，这是一个对许多人来说，原因是多方面的特殊事件。它通过广泛和从事议程固定，参与者得到交融与全球重要的人的聚宝盆。这也是看到的地方，并为国家元首，政治家，学者，思想领袖，媒体专家，老总，和电影明星。

在这温馨的环境，世界经济论坛年度会议仍然是今年最热门的门票之一，但其组织者希望自己的事件，要远远比目前的大，久负盛名的通话店。他们希望它在国家，区域和全球各级的政策影响。

然而，多年来，在一个越来越不稳定和不确定的世界中，达沃斯已经没有太大的影响。

当我问为什么这么少的有趣的讨论，已在那些美丽的瑞士阿尔卑斯山的地方，如果有的话，导致与会者改变，提高最广大人民的生活，我得到的答复。

有人说，典型的达沃斯议程的实力也是一个弱点。的主题是过于雄心勃勃。在试图掩盖太多太多，广度胜过深度。

其他举等人的不同组的意见提炼成具体的行动要点的固有困难。这绝不是一件容易的努力，它成为一个几乎是不可能的，当它涉及到这么多的财富和这么多的自我。

再有那些认为太多的时间都花在什么有发生，尤其是当事情已经过去了可怕的错误和时间太少致力于围绕在下一角落在于争论，后一个。

但大多数达沃斯奉献我说话说的问题是更根本的。他们说，许多真正重要的参加者在组织者的更高的野心不感兴趣，有的甚至怀疑他们。在任何情况下，这些关键球员不希望放弃控制他们的叙述，他们当然不希望达沃斯委派其个人议程的任何有意义的部分。

达沃斯论坛组织者，除非作出重大改变，这将是难以克服这些障碍。具体来说，他们需要做两件事情，似乎没有一个人对此类事件提出愿意或能够做到的。

首先，他们必须调整结构达沃斯论坛的议程和讨论如何。

能够更高效，更实用，他们需要在一些关键时刻要少得多包容性。非常困难（和高度细腻）决定必须涉及到谁，在某些会议和排除。这将需要额外的（并密切监察）参与者的地位，这只能由当前世界经济论坛的召集人/主持人角色转变成更强大的一个super-conductor/enforcer实施水平。

二，主要参与者必须真正的合作，还没有发生的事情。缺乏这种合作已经在一段时间，特别是昂贵的，当世界上的经济深渊的边缘蹒跚。

必须拿出一个共同的责任更大意义上的共同利益。狭隘的国家议程，必须开发更多的余光，必须由可信的同行评审的支持和相互保证。正在做这些事情的概率是很小的，如果不是微不足道。

不，我对此感到高兴。鉴于今天在场上的全球变化，为更好地协调和理解那些影响关键领域的发展中有一个巨大的需求。这个世界已经失去了许多经济和社会政治锚，领导人都不可能保持与地面上的发展。怀疑往往排水量相互的信任，这就是为什么这个著名的集会将继续下降，其巨大的潜力。

即使没有什么相应的得到执行，达沃斯将仍然是一个热门车票，但我不会去。

由穆罕默德·埃尔-埃利安

是他自己所表达的意见。

经济新秩序正在我们眼前的形状，它是一个包括老西方大国和新兴世界的新的重大球员之间的加速收敛。但这种融合的驱动力不大，几代经济学家的设想时，他们指出，旧秩序的不足;这些势力的影响可能是同样令人不安。

几十年来，不少人感叹西方主导的全球经济体系的程度。从设计的金融服务的多边组织的治理，全球基础设施被视为有利于西方的利益。虽然是大谈改革，西方国家一再反驳严重的努力将导致其权利的有意义的侵蚀。

看似克服这些阻力上几次，结果是渐进的和胆小的变化。因此，许多新兴市场经济体失去了信心“联保”，全球系统，据称在他们的处置，特别是在非常需要的时候。

这种情绪的变化，在亚洲，东欧和拉丁美洲的金融危机在1990年底和2000年初，许多在这些地区被视为西方的不足，设计不良的反应催化。同他们在双边援助和多边机构，如国际货币基金组织动摇，新兴市场经济体的信任 - 走上了向更​​大的财政自力更生的持续驱动器 - 在亚洲的领导。

一旦他们成功地克服了痛苦的危机管理阶段，许多这些国家累积预防垫子以前是不可想象的国际储备水平。他们熄灭产生和维持庞大的经常账户盈余十亿美元的外债。和他们增加了对国内金融中介的规模和范围，以降低他们易受外部风暴。

站在这些事态发展形成鲜明对比的是在西方发生了什么。有前所未有的杠杆作用，创造巨额债务，看似无限的信贷权利意识占了上风。金融过度成为规则而非例外，促进了金融创新和贷款标准和审慎监管的侵蚀。

突然，世界天翻地覆：“丰富”的国家巨额赤字运行，并在某些情况下，净负债从净债权国地位的倾斜，而“贫穷”的国家盈余和对外资产积累的大量库存，包括金融债权在西方国家的经济。

谁知这些国家知道他们不同的路径，最终会助长大的全球经济失衡，并最终引发金融危机已经动摇了现行的国际经济秩序的根基。

有没有恢复充分的顺序。强劲复苏，而不是西方增长缓慢定期调情衰退，在失业率高企的时间和乘以债务问题的担忧，尤其是在欧洲。在一个惊人的事件反过来，几乎所有西方国家现在必须担心其信贷评级，而不少新兴经济体继续攀升的收视率的阶梯。现在，我们可以考虑西方代表团前往新兴国家申辩，毕恭毕敬，金融支持，直接和通过国际货币基金组织的形象。

乍一看，西方国家和新兴国家之间的这种不寻常的收敛，似乎反映了一个新的在头脑里的国际经济秩序的主张。但外表可以是具误导性的，在这种情况下，他们在一个重大的误导。

倡导者设想一个有序的过程中，伴随着经济融合，并促进全球经济增长。他们预见到一个合作的过程，由开明的决策指导。但正在发生的是完全不同的和更加难以预测。

表现出开明的领导，而不是西方的决策者们一直在地面上的滞后的现实，一个扑朔迷离的拒绝，误诊，破坏他们的反应和争吵的混合物。在有条不紊地进行，而不是今天的全球变化正在推动产生严重的金融危机和美国似乎无法恢复持续的高利率，国内生产总值的增长和创造就业机会从欧洲去杠杆化的无序力量。

回应多边机构，特别是国际货币基金组织，欧洲泵入深不可测的融资金额。但是，扭转了无序的去杠杆化，并鼓励新的私人投资，而不是官方融资仅仅负债从私人部门向公共部门转移。此外，许多新兴市场国家已经注意到政策的附加条件，以数十亿美元已运到欧洲的几十强加给他们的是在1990年和2000年初相比，相形见绌。

幸运的是，导致相应的（以及越来越无序）全球变化的过程中，尽管落后，而不是它是不是太决策者来不及赶上。但这样做需要超过只是更好地在欧洲和美国的国家决策，也是时间紧迫和深刻的多边体系及其主要机构的改革。这一过程需要由新兴世界作为一个真正的平等和西方列强的合作伙伴共同领导。

穆罕默德·A.·埃里安是PIMCO的首席执行官兼联合首席信息官，当市场碰撞“一书的作者 。

版权所有：Project集团，2011年。
www.project-syndicate.org

照片：国际货币基金组织的董事总经理克里斯蒂娜·拉加德（C）与尼日利亚财政部长恩戈齐Okonjo-Iweala说（R）的笑容，因为他们，2011年12月20日在拉各斯举行的联合新闻发布会。路透/斯蒂芬Jaffe-IMF/Handout

由穆罕默德·埃尔-埃利安
是他自己所表述的意见。

与欧洲危机继续占主导地位的消息，许多人现在认识到，当今的全球经济面临着一个不同寻常的前景不明朗。事实上，欧洲的动荡，但在全球多个发挥转口路线之一。可少公认的是具体部门已经在相应的和永久的方式改变的程度。

特别是全球金融市场波动增加，流动性蒸发，而政府的作用是明显的，但不一致。这是一个部门，改变市场的运作，随着机构的前景。为经济增长和就业的影响有关。

在近期金融市场波动 - 无论是在世界各地股市的令人眼花缭乱的波动或欧洲主权债券的碎片 - 远远超过什么是正在进行的全球重新对齐保证。我们还看到一个潜在的流动性条件的相应转变的影响 - 或油润滑流的信贷和储蓄者和借款相关找到对方和有效互动的能力。

面对一系列的内部和外部的压力，银行似乎被限制，他们投入到市场庄家的资本额。结合这与许多市场参与者的自然倾向，撤退到场边时，波动性和不确定性增加，你所得到的是一个更高的交易成本，减少交易量，突然的举动和估值的破坏性组合。

我们还目睹的信任 - 从个人投资者和机构的法团 - 使用它来管理他们的资产负债表风险的工具，许多市场参与者的损失。对冲当前和未来风险的能力降低，甚至迫使一些转变，从利用市场来管理他们的“净”的风险，简单地减少总地基。

同时西方银行，不论他们喜欢还是不喜欢（大部分都没有），现在开始的旅程 - 远离一些人称为“赌场”银行无论在美国还是在别人的标签“实用新型”。“欧洲银行是在私营和公共部门的巨大压力，变得越来越复杂，减杠杆，风险小，比较枯燥。

私人债权人隐瞒新的信贷，迫使某些银行的杠杆 - 一个过程，在银行股的大幅下降和资本缓冲的陪同侵蚀扩增。同时，银行传统的全球霸主地位是根据总部设在健康的新兴经济体的对手日益增长的竞争压力。

这一切的结果是进一步在西部银行体系的资产负债表，跨板收缩。这是导致欧洲一些机构（如希腊）也正在经历有意义的存款外流。

2008-09年全球金融危机的崩溃后，政府也希望自己的银行，以更好的资本充足率和更有纪律。和而实施都已经远离一致和小于充分有效的，其意图是明确的：更紧密的护栏和加强执法，以排除任何过度的杠杆作用，不良贷款的做法，和不适当的补偿办法，野生西部的经验重演。

中央银行和政府的影响也正在感受到在其他方面，影响市场的运作和效率。一些影响是可见的，并在很大程度上可知，而其他人，就其性质而言，是前所未有的，因此较难预测。

三年了，央行已经采取了一系列“非常规政策”，特别是在美国和欧洲。目标已经降低长期的经济衰退和严重的金融动荡的可能性。

这样做，央行已经远远超出了他们的审慎监管和调控作用。他们在市场上已成为重要的直接参与者 - 基本上使用的印刷机，购买选择性证券，而不是通常的商业准则，锚市场的正常运作的基础上这样做。

在西方世界中的地位的主权风险的侵蚀，市场的可预测性也受到影响。原因是双太少的经济增长方式和方法太多债务问题。现在有更少的真正的“AAA”锚定其核心是一个不太稳定的全球金融体系的影响。

这一切都将转化为一个非常不同的金融环境。变化将最为显着的银行。

寻找西方银行那么复杂，全球性的，少了几分相互关联，因此，减少全身。随着一些银行摇摇欲坠的边缘，某些欧洲国家的政府（例如，希腊）将别无选择，只能到他们的金融体系国有化的一部分。

此外，与西方银行体系的范围和规模萎缩，看看周围那些现在堵塞建立新的信贷管。与支持经济增长和就业，特别是在较长期的投资，如基础设施的目的，这些管道将指示或由政府启用。

毫无疑问，金融业的面貌正在迅速演变。有些变化是故意设计和实施。他人正在实施由地面上的快速变化的现实。

最终目标是较小的和更安全的金融服务部门。当我们到达那里时，将私利和共同利益之间取得一个更好的平衡。银行将更好地服务实体经济，不暴露灾难性的危险和有害的虐待。

在未来几个月将揭示光在何种程度上的政府，并在较小程度上，商界领袖能够妥善协调的过程。他们属于更短，更少的增长和减少工作会有。

照片：货币交换的电话，说在他的店，2011年1月5日在萨那。路透/哈立德·阿卜杜拉

由穆罕默德·埃尔-埃利安
是他自己所表述的意见。

这是时候说再见了来自美国的政策制定者的信心的保证，日本可以不它还时间要后悔的，日本的“失去的十年”的增长是由于独特的日本失败的组合，踌躇满志的断言：“发生在这里。” - 从不足的政策行动，以薄弱的公司治理和穷人的政治领导。

连同他们的欧洲同行，美国的决策者都意识到的东西，日本已经经历一段：这是非常困难的结构性障碍和资产负债表的过度步履蹒跚的经济管理。如果没有重大变化的政策方针的成效，这可能会导致实现扩大对美国可能的“皇民”的社会关注，担心，在这种情况下，该国将无法导航这种现象以及日本。

美国继续发现很难产生有意义的经济增长和创造足够的就业机会。尽管多的财政和货币刺激方案 - 事实上，破纪录的 - 经济未能恢复，随后全球金融危机的急剧收缩，果断。

联合国和就业不足的增长，仍然令人不安的高，而平均失业持续时间打一个又一个不幸的纪录。为了使一个糟糕的情况更糟糕，这是劳动力最脆弱的群体 - 年轻和教育程度较低 - 他们正在重灾区。在这个过程中，社会经历了一个已经在收入和财富的过度不平等的进一步恶化。

低增长意味着，美国是无法以“安全杆”从过去十年的金融过度。因此，经济面临一个翻倒进入另一次衰退的风险。

在这次经济衰退将是可怕的 - 从经济，社会，政治和体制的角度。此外该国的失业危机，几乎四分之一的房主欠抵押贷款债务超过其房屋的价值。与地面的相当长一段时间在0％现在的利率政策和财政赤字在国内生产总值的近9％徘徊，是有限的政策灵活性。

美国发现的是，日本已经一段时间痛苦地称为：后泡沫经济是既复杂又令人费解。

这是不容易带回清醒的经济杠杆，债务和信贷的权利过量。难上加难的是，当它面临着经济增长的结构性障碍时，政治体制在改革的一切企图破坏;时，全球经济正在削弱和受到重新的金融脆弱性。

我怀疑，颇有几分将在未来数月写了关于美国经济可能日本化。这是很容易的预测。更困难 - 争议 - 是预测等工作的重点，以及随着时间的推移，也评估美国和日本之间的相似性和差异，当谈到应对多年的低增长，而到更大的经济退化的倾斜，并加剧社会紧张局势。

美国缺乏两个重要的特点，使日本社会，以应付困难的情况相对较好。首先，它不具有社会凝聚力的水平，在日本盛行。因此，它不具有相同程度增长缓慢的时候，可以在有利的社会安全网。其次，美国既不是日本的净债权国的地位也产生其国际收支盈余的能力。正因为如此，它具有一个缓冲的减少，从而增加从国外的中期资本的脆弱性。

有了这些属性，美国将发现更难处理多年的缓慢增长，创造就业疲弱和进一步的收入和财富不平等。经济的成本会更高，更大的金融脆弱，更多的物质和社会后果。

这又是为什么当选代表美国人民和他们指定的决策者，必须做更多的今天，在他们的思维经济增长的风险“皇民内部的原因。”他们还必须认识到，在全国拥有较少的金融和社会垫子来对付这种风险，它应成为现实。

越早发生，更大的机会，美国可以使用其仍然相当大的优势，克服其政策瘫痪，走上急需 - 讨论 - 采取措施，消除结构和债务障碍，创造就业机会和更高和更具包容性，经济增长。

在此背景下，这是令人鼓舞的，看到政府最近提出了一些步骤，假设国会的合作，将作为进一步取得进展的基础。 This is especially true for the jobs proposal , and also for the reforms to housing. But much more needs to be done to urgently improve the key enablers of sustained expansion: namely, the functioning of the housing and labor market, the process of credit intermediation, productivity-enhancing infrastructure, and balancing immediate fiscal stimulus with medium-term reform of both the revenue and spending side.

There was a time when America looked down on Japan for the latter's inability to deal with its economic problems. No more. Like Japan, America is now realizing how difficult a post bubble economy can be. The fear is that it will also find out that that it lacks some of Japan's attributes needed to cope with long years of economic stagnation.

The US has no time to waste to build on the important, albeit small progress that has been made in recent weeks. If it does not, there is a risk that the country's economic fate could end up being even worse than what Japan has experienced. Everything possible should be done to minimize this risk.

Photos, top to bottom: An employee of a foreign exchange trading company passes a graph showing the movement of the Japanese yen's exchange rate against the US dollar, at a dealing room in Tokyo October 31, 2011. Japan intervened unilaterally in the currency market to weaken the yen after it scaled another record high against the dollar on Monday, Finance Minister Jun Azumi said. REUTERS/Issei Kato; An employee of a foreign exchange company walks past a monitor displaying the Japanese yen's exchange rate against the US dollar in Tokyo October 31, 2011. REUTERS/ Yuriko Nakao

By Mohamed El-Erian
The opinions expressed are his own.

Friday's worldwide sell-off was a fitting end to a miserable month and a horrible quarter for equity markets.

The 14.3 percent quarterly loss in the S&P, a widely-followed index for the largest stock market in the world, was its worst performance since the fourth quarter of 2008 — a particularly bad omen given the additional market collapse that followed in the first quarter of 2009 and that brought the world to the brink of a global economic depression. Meanwhile, market and economic narratives are dominated even more now by words such as alarm, anxiety, worry and, to quote from the latest Federal Reserve statement, “significant downside risk.”

Is all this an exaggeration? Are markets stuck in an irrational cycle of self-feeding fear? Is the volatility, including eye-popping intra-day swings, just a head fake?

As much as I would like to say yes — after all, the balance sheets and income statements of multinational companies are still rock solid — the answer is no. The system is sending signals rather than making noise. It is warning about the highly uncertain and rapidly deteriorating outlook for the global economy; also, it is lamenting astonishingly inept policy-making in far too many western economies.

I know exactly how many feel. At an event last week in Washington, I was asked about my feelings about the global economy. My response was “between concerned and scared.”

I worry that, absent a dramatic change in policies in America and Europe, things will get worse before they get better. I fear that, given this possibility, it would then take years, if not decades, to repair the underlying damage done to economies, jobs and people's lives around the globe.

We are here because of the interactions of three distinct, yet inter-related forces: poor economic growth, excessive contractual liabilities, and disappointing policy responses. The result is that western economies are getting trapped by the lethal combination of an unemployment crisis, a debt crisis, and mounting fragilities in the banking sector.

The longer this persists, the greater the risk that even the healthiest parts of the global economy, and thankfully there are still quite a few, will get dragged into a prolonged period of economic and financial stagnation. No wonder the cover of this week's Economist magazine portrays the global economy as a black hole carrying a simple yet powerful message “Be Afraid.”

It should come as no surprise that, despite record low interest rates, companies with massive cash would rather stay on the sidelines than engage more fully in the global economy. It is also not surprising that, after showing resilience and tremendous relative strength because they sell to affluent people around the world, even high end retail stocks have been hammered recently.

If the three underlying crises — unemployment, debt and bank fragilities — continue to be left unattended by policymakers, the de-leveraging of the global economy will accelerate in the next few weeks and months. Selling will beget selling. Economic weakness will sap the willingness to spend by those with healthy wallets. And, over time, strong balance sheets will be infected by the growing economic, financial, political and social malaise.

Only policymakers, supported by more enlightened politicians, can change this outlook. Fortunately, there is now heightened awareness in American and European policy circles of the severity of the situation.

The fear of impending generalized dislocations — what the Managing Director of the IMF, Christine Lagarde, correctly labeled a “dangerous phase” — must now transition into three effective responses: immediate circuit breakers in Europe (what I call “very important and very, very urgent”); structural reforms in emerging economies, Europe and the US (“very important and very urgent”); and demand stimulus in emerging economies, Germany, and the US (“bridging mechanisms”).

The bad news is that having been “missing in action” for so long, policymakers will find it challenging to regain immediate control of a rapidly deteriorating global economy. This is particularly true for Europe where the feasible set of policy alternatives is now very far from a “first best.” Every approach that promises considerable benefits comes with substantial costs and risks as well.

Yet this is no reason to procrastinate even more. The longer policymakers wait, the smaller the room for orderly maneuver. In the meantime, dissatisfaction of electorates with the political process will continue to grow. Indeed, as this week's Economist cover also notes, “until politicians actually do something about the global economy … be afraid.”

Markets are in the unusual and very uncomfortable position of being wholly dependent on policymakers and politicians. The investment relevance of company analysis, no matter how good, pales in comparison to the importance of getting the policy calls correct.

Faced with this, investors should also remain cautious. Yes there are already opportunities but they will be even more attractive down the road given that the world is now subject to both a synchronized slowdown and de-leveraging.

Investors should wait for stronger evidence that policymakers have the willingness, ability and effective instruments to respond properly. This is a time where cash and cash equivalents provide investors with tremendous optionality as the volatile winds of de-leveraging force far too many others into firesales. It is a time to be patient. And it is a time to strengthen firewalls that limit the further spread of economic contamination and financial contagion.

Photos, top to bottom: An artist's impression of a growing supermassive black hole located in the early Universe is seen in this NASA handout illustration released on June 15, 2011. REUTERS/NASA/Chandra X-Ray Observatory/A.Hobart/Handout; Anti-capitalist student protestors demonstrate outside the Bank of England in London October 10, 2008. Britain's top share index slid 8.2 percent by midday on Friday in a global sell-off in equities as investors feared government efforts to unclog liquidity strains would not avert a global recession. REUTERS/Luke MacGregor; A reporter gestures at a board showing NASDAQ losses at midday at the NASDAQ Market site in Times Square, New York, January 22, 2008. REUTERS/Jeff Zelevansky

By Mohamed El-Erian
The opinions expressed are his own.

European officials must feel like that they were just on the receiving end of an “intervention” staged by their colleagues from other countries – a process whereby a group of people come together to “shock” a friend/family member into recognizing the depth of a personal crisis and the urgency of embarking on proper corrective actions.

The venue was this past weekend's Annual Meetings of the IMF and World Bank. This event brings together policymakers from almost 190 countries, along with business leaders and media. It is full of formal meetings, seminars, press conferences, and bilateral discussions.

It is a well-attended gathering that serves many purposes. One of them is to enable policymakers to collectively get a feel for the state of a highly inter-connected and complex global economy. At times in the past, this has proved absolutely critical for designing policy responses that avoided terrible collective outcomes.

This was certainly the case in 2008. On that occasion, a series of consultations and discussions led policymakers from around the world to the startling conclusion that, after the disorderly collapse of Lehman Brothers, the global economy risked tipping into a great depression.

The follow-up was one of the most impressive examples of global policy coordination that culminated in the highly successful G-20 Summit in London in April 2009. The world averted an economic depression that would have spread unemployment, poverty and misery all over the world.

Unfortunately, it did not take long for such coordination to give way to competing and, at times, conflicting national agendas and narratives. This was particularly true in America and Europe where policymakers failed to understand and act on consequential global and national realignments.

Today the global economy is highly vulnerable to major dislocations on account of three distinct but mutually reinforcing problems: a sovereign debt crisis (whose epicenter is in Europe), banking system fragilities (Europe), and an inability to grow robustly (America and Europe).

As Europe features in all three, it should come as no surprise that European officials were approached by lots of people this weekend in Washington. Many wanted to understand what the European policymakers had in mind; and they wished to ring a very loud alarm that would spur these officials into bold and decisive action.

Wherever they turned, European officials heard a consistent message which typically consisted of four specific points:

• The bickering and dithering of European politicians and policymakers have allowed the crisis that originated in Greece to spread too far and wide;

• The crisis is has now gotten close — far too close — to being uncontrollable;

• Virtually no country in the world would be immune from the adverse consequences; and, therefore,

• Europe needs to finally step up with decisive policies that are underpinned by a common political vision of what the Eurozone should look like in five years time.

Initially, the reactions of most Europeans ran the gambit: from denying the severity of the crisis to diverting the blame elsewhere. Some hit back, noting that they were neither blind nor deaf. By the end of the meeting, however, most seem to have heard the messages, taken them to heart, and indicated their intention to act on them.

Recognition and proper diagnosis are essential components of a durable solution to a problem. It is therefore good news for the global economy that, especially after this weekend, there is little doubt in the mind of Europeans about the urgency of their situation. They also know that the world is watching and hoping.

It is also good news that some key officials even went so far as to identify a timetable for action – the six-week run-up to the next G-20 meeting in France. True, it is a timetable that is excessively influenced by political considerations rather than economic and financial ones. As such, it may be challenged by markets that are unsettled by fragilities in both sovereign debt and banking systems.

So, will this Washington intervention and timetable hold? The answer depends on five key issues:

First, the Europeans must take immediate — and I stress immediate — actions to stabilize the banking system and counter more effectively the persistent recent rise in yields on government debt issued by Italy and Spain in particular. This cannot wait six weeks.

Second, they must quickly come up with operational mechanisms that build secure firewalls around at least one highly troubled country (Greece) so that it can default without triggering a tsunami for others in the Eurozone.

This will only be possible if, and this is the third point, the European Central Bank (which has been carrying most of the burden so far) receives much more support from national fiscal and regulatory authorities.

Fourth, bold structural decisions must be taken to strengthen the architecture and functioning of what, in the final analysis, is likely to be a smaller, less imperfect and stronger Eurozone.

Finally, politicians must secure the airspace for the technocrats that are waging difficult day-to-day battles through better communication, a common vision and a unified purpose.

This is quite a list, and there is very little time to waste.

By Mohamed A. El-Erian
The opinions expressed are his own.

Unlike recent G-7 meetings of finance ministers and central bankers that were essentially ignored, there was quite a bit of interest in the one held over this past weekend in Marseille. That interest turned out to be misplaced, however, as the G-7 delivered little of substance yet again.

Once more, the G-7 issued a communiqué whose disappointing lack of content contrasts sharply with the deteriorating health of the global economy, the intense risks ahead, and legitimate policy confusion. As an illustration, try reconciling the G-7′s “catch all” wording on fiscal policy — “we must all set out and implement ambitious and growth-friendly fiscal consolidation plans rooted within credible fiscal frameworks” — with the two strikingly opposing views expressed last week by Germany's Finance Minister and the US Secretary of the Treasury.

It is not just that the G-7 disagrees on policy prescriptions; the group failed again to converge to the type of common analysis that lies at the root of any coherent policy formulation.

Neither the global economy nor the financial markets can wait for the G-7 to get its act together — especially as the world's three main economic areas each face a set of mounting challenges.

With structural impediments to both economic growth and the safe de-levering of excessive indebtedness, America's economy is succumbing to the cumulative impact of policy shortfalls and political dysfunction. If President Obama's speech from last Thursday fails to act as a dramatic economic and political catalyst, it is just a matter of time before America tips into another recession, unemployment rises even further, and a growing number of households and small companies are forced into bankruptcy.

On the other side of the Atlantic, Europe's dithering policy response means that the functioning and institutional integrity of the Euro-zone are now threatened by more than just the troubled sovereign credit of peripheral economies. The European financial system is under enormous pressure as markets legitimately worry about both bank capital inadequacy and the continuous deterioration of asset quality.

All this puts the emerging economies in a tough policy position. With strong balance sheets and growing domestic resilience, they have the unusual historic ability to act counter-cyclically to stimulate internal demand and, thereby, insulate their populations from the West's malaise while allowing for a more orderly global rebalancing.

Yet the incoherence of policies in America and Europe translates into less inclination for emerging economies to do so. Indeed, they may well opt instead for greater self insurance and, in the process, become another pro-cyclical driver for a weakening global economy.

With these issues continuing to fester, attention now shifts from this weekend's disappointing G-7 to the IMF/World Bank meetings in Washington in two weeks and the subsequent G-20 Summit in France. The hope is that the former can lead to a common analysis of what ails the global economy, and that the latter allows for better policy formulation. In the meantime, look for markets to fret about the worrisome global economic outlook and a depressing lack of global policy coordination.

The G-7 is fortunate that it is not required to justify the expenses of its meetings in terms of what is achieved. If it had to, these meetings would be more decisive and/or less frequent.

By Mohamed El-Erian
The opinions expressed are his own.

This weekend's Labor Day celebrations in America mark a difficult time for workers. Having experienced a multi-year decline in their share of national income, they are now suffering the brunt of the current economic malaise; and there is little to suggest that the situation will improve any time soon. As a result, the country's economic hardships risk morphing from pressuring specific segments of the population to undermining more general aspects of social justice.

The numbers are striking — and worrisome. Over the last 30 years, labor's share of the national pie has declined to 44 percent from 52 percent, with profits growing at twice the annual rate for average wages.

This morning's monthly employment report adds to the concerns. Unemployment remains very high, whether measured by the most-quoted unemployment rate (9.1 percent), the less partial under- and un-employment rate, (16.2 percent) or, most comprehensively, the proportion of total adults who are not working (42 percent compared to 35 percent 10 years ago).

The duration and composition of joblessness is very troubling. The average unemployed American has been without a job for 40 weeks, a record level, and 44 percent of the unemployed have been out of a job for more than 26 weeks. The incidence of joblessness is severe among those lacking a college degree (11 percent compared to 4 percent for college graduates). For 16-19 year olds the unemployment rate is a horrible 25 percent.

Whichever number you look at, America's labor market problems constitute a full-blown crisis with far reaching economic, social and political consequences. If current trends continue, joblessness will become stubbornly embedded in the system and, distressingly, some of the unemployed will become unemployable.

We all know that such a crisis fuels rising poverty and misery. Shelter is an issue, too, as mortgage and other debt payments are harder to meet. And credit will become even scarcer for those who are already struggling.

Regrettably, there is little to suggest that, left to its own devices, the economy would improve any time soon. It is mired in low growth and insufficient job creation; and the balance of risks is increasingly tilting toward a recession.

Since economic growth will not solve the issue, what about government action? Here, initial conditions are far from ideal.

Budgets — be it state, local or federal — are generally stretched. Indeed, rather than reduce the challenges facing workers, current budgetary policies accentuate them through cuts in education, health care, emergency benefits and other social services. Meanwhile, active redistribution policies are off the table with our extremely divided Congress vehemently disagreeing on what constitutes appropriate policy responses. And the Federal Reserve is already in full policy experimentation mode, with limited durable impact on economic growth.

It is tempting to blame all this on what economists call an “exogenous factor” – a phenomenon that is outside direct societal control. The two most cited factors are globalization and technological advances.

Globalization has brought hundreds of millions of low paid workers into the global labor force, thus putting pressure on higher paid ones in advanced countries such as the US. Technological progress has allowed companies to raise productivity, helping them generate record profits with fewer employees.

Before embracing this explanation wholeheartedly, it is wise to recall Reinhold Niebuhr's prayer asking God to grant us the serenity to accept the things that cannot be changed, the courage to change those that can and the wisdom to know the difference.

It is not feasible to reverse either of those two phenomena (globalization and technological advances). It is neither desirable to do so either given that, overall, they have beneficial impact on global welfare.

Think of the millions of people around the world who have been pulled out of absolute poverty and misery. Think also of the wider range of affordable goods available to consumers globally (the largest segment of which is in the US). And think of innovations that have saved lives and improved the quality of life.

Rather than try to unwind globalization and technological progress, the challenge for the US is to adapt its labor force and its economy to these realities.

Through better policy making at both the national and international levels, America should — and can — be a bigger beneficiary rather than a helpless victim. No wonder President Obama's speech next week is so eagerly anticipated, and rightly so.

While we must not underestimate the significant design and implementation difficulties facing the President, many look to him for restoring America's economic leadership. This involves three challenging and complex steps (especially given today's economic, financial and political environment): propose a set of policies that decisively lift structural impediments to growth; mobilize sufficient political support to start the multi-year implementation process; and, as the data evolves, provide for timely mid-course corrections as appropriate.

Better off segments of the population may be tempted to dismiss all this as irrelevant to their particular reality. After all, they are doing well — in several cases, extremely well. But such an attitude is short-sighted. It is not just about fairness; the rich have genuine self-interest in reversing the country's economic malaise and the worsening of income and wealth inequalities.

Whichever way you look at it, the outlook for the wealthier cannot be divorced from society as a whole. Such considerations have already led some American billionaires to react in dramatic fashion.

Warren Buffet and Bill Gates are among those leading the way, through both actions and words. Howard Schultz, the CEO of Starbucks, has urged companies not to wait for government policy but instead to move more aggressively to employ and produce more. Many others are doing their part, albeit in a less public fashion. They know that national prosperity cannot, and should not, be sustained without social justice.

Unlike many parts of the world, America has experienced, until now, few if any meaningful eruptions of social tensions. Yes, there have been some “flash mobs”, but they pale in comparison to what has occurred elsewhere this summer.

This is not about the comparisons out there to uprisings in Arab countries driven by a thirst for social justice. Rather, it is about what the series of unthinkables that has already occurred in several advanced countries where, facilitated by social media that lowers traditional coordination problems, more people are taking to more streets to express frustration and, in some cases, a call for greater social justice.

Britain and Greece have experienced widespread rioting. Car torching in Germany is now way too common for comfort. France, Italy and Spain have had national strikes. Israel has seen the sudden emergence of a large social movement that has taken both local politicians and worldwide observers by surprise.

This weekend, American workers will understandably temper their celebrations. Their malaise is about more than the challenging economic headwinds. It is about fundamental social issues.

America is now on the growing list of advanced countries where social cohesion is coming under increasing pressure. If left to fester through inadequate public and private sector responses, this phenomenon will damage the welfare of current and future generations. Loud alarm bells should be ringing everywhere.

Are you tired of all the stories on Europe's financial crisis and American politicians' endless bickering about debt and deficits? Are you tired of weekends of hectic negotiations as policymakers rush to cobble together some agreement before markets open? If you are, you are not the only one.

Millions of people, including stressed-out policymakers on both sides of the Atlantic, wish to put these issues behind them. Unfortunately, despite many announcements, they are unable to do so decisively, and for good reason.

So we better understand why, if we want to minimize the risk of collateral damage and unintended consequences.

To do so, you need only remember one rather clumsy phrase: “safe de-levering” (also known to some as “safe de-leveraging”), or the lack thereof. Consider please each word, starting with the second one.

De-levering refers to the rehabilitation of balance sheets that have gotten over-indebted to such an extent that they are unsustainable going forward. The contributing causes are usually numerous and many years in the making.

In Europe, three peripheral countries face immediate and significant de-levering pressures. Greece and Portugal are two of them. They had too many years of irresponsible government spending, inadequate taxation, weak public administration, and insufficient economic growth. The third, Ireland, was fiscally responsible but made the big mistake of using what was a relatively healthy public balance sheet to assume the massive losses of its irresponsible banks.

These three countries now face a buyers' strike. Lenders have been resisting the renewal of their credit lines and, needless to say, have no appetite whatsoever to provide incremental funding. No wonder interest rates have soared and financing has dried up, other than official bailouts from neighboring countries, the European Central Banks and the International Monetary Fund.

The result is not just a liquidity crisis; but also a solvency one. With government gross debt burdens ranging from 100 percent of GDP in Portugal to 156 percent in Greece, these countries are now embarked on an unpleasant, forced de-levering process.

America's case is different. Yes, it has a high budget deficit (over 10 percent of GDP) and has experienced a dramatic increase in its debt-to-GDP ratio since the global financial crisis. Yes, the fiscal outlook gets cloudier as a result of a structurally weak budget. But unlike peripheral Europe, it is nowhere near an immediate liquidity crisis.

America's creditors are more than willing to fund the country at historically low interest rates. Rather, it is political squabbles that have dramatically brought forward medium-term fiscal challenges, and have done so through the use and misuse of the debt ceiling, an arcane but, as we have all found out, a rather lethal legislative weapon.

We should all accept that Europe and America — the former for fundamental reasons and the latter for self-inflicted ones — are now in a de-levering cycle whose consequences will be with us for many years.

The actual process of de-levering can play out rather quickly. Indeed, too fast a de-levering can be catastrophic in terms of its impact on growth, employment and poverty. So you can be sure that policymakers will do their utmost to deliver a safe, gradual process.

The best way to do so is through high economic growth. This maintains living standards and generates incremental income to pay off debt, thus providing an orderly path to medium-term debt sustainability. Unfortunately, this option is not available today to either Europe or the US as both are stuck in what PIMCO has been describing for over two years now as the bumpy journey to a new normal .

Other than some short bursts, Europe and America are unable to sustain the sort of economic recovery that would make a meaningful dent in their debt dynamics. They will remain in this regrettable situation until policymakers become more serious about a comprehensive and coordinated set of measures to remove structural impediments to sustained economic activity — including steps to improve the functioning of the housing and labor markets, better worker retooling and retraining, enhanced education systems, even more bank lending, improved productive infrastructure, etc.

If they are unable to grow out of their debt problems, countries have four other options. Two of these are also available to us as individuals: we can default, and let restructuring lower our debt burdens, albeit in a rather disorderly fashion; or we can implement austerity, spending less in order to generate cash to pay off our debt.

Because countries control the printing presses and write regulations — things that the rest of us do not have or cannot do — they have two additional alternatives. They can try to inflate their way out of the debt, or they can reduce it through years of “financial repression,” that is, paying millions of depositors and creditors much less than they deserve in order to divert funding to debt payments.

Judging from what we have seen so far, governments are opting for different mixes.

The three peripheral European governments are imposing harsh austerity on their populations — remember the riots in Greece? — and also benefiting from the willingness of their European neighbors to financially repress their citizens in order to provide additional official funding. At least one (Greece) is having to go further by also partially restructuring its debt.

America is talking about austerity, including this past weekend's compromise fiscal framework, but using financial repression. So far, this has taken the form of the Federal Reserve maintaining interest rates at extremely low levels for an exceptionally long period of time — so much so that savers and creditors are paid interest rates that are below inflation, and in some cases, well below inflation.

This will not suffice. Look for America to intensify financial repression through regulations that forces banks and other regulated entities to hold low yielding government securities. Also, it will attempt to generate unanticipated inflation. Ultimately, it will be forced into more painful austerity involving both spending and tax measures.

The de-levering pressures will be with us for years, and governments will mix and match from the menu of options. Accordingly, periodic debt dramas and crises will not go away any time soon. Debt is simply too high and there isn't enough economic growth to painlessly de-lever. Each response that governments decide to adopt has different implications for us, as savers, investors, debtors, home owners, and business people (the topic of a future piece).

Unfortunately, none of us have the ability to fully insulate ourselves from the collateral damage and unintended consequences. The best we can do is to understand the process, including what governments will do. In this way, we can try to minimize, though never eliminate, the adverse impact of de-levering.