IN THE US, employment figures are not stabilizing as quickly as needed, with unemployment rates remaining high at 9.6% with a risk of topping 10%. In a worst case scenario, the US can be falling back into recession, warns investment bank Goldman Sachs. The US economy is being held up by private consumption, which could wane considerably if unemployment figures continue to rise. The Fed is running out of interest ammo and now plans to raise the money supply in the banking system to lower the dollar rate and force down interest rates on home loans, car loans and loans for other consumer and corporate products.

CHINA IS BUSTLING along full steam ahead and the trade surplus is growing. Because of its ties to the dollar, the Chinese yen is kept at artificially low levels in comparison to the dollar according to the US, which supports continued strong export from China. The Chinese government claims that they need these current financial developments to handle the transition from an agricultural economy to a more industrialized economy. Each year, about 40 million jobs are rationalized away from agriculture and this workforce needs to be plucked up by other enterprises. Rationalization of agriculture is necessary to manage the domestic food supply.

THE SITUATION IN EUROPE is divided. Countries such as Greece, Portugal, Italy, Iceland, Spain and Ireland with large public deficits and unstable bank systems drive up interest rates and impede recovery. Germany, on the other hand, has a large trade surplus, which derives largely from trade with countries in southern Europe. Germany´s surplus is part of the weak European countries´ trade deficit. This imbalance within Europe creates tensions that are difficult to defuse with a common currency and domestic budget liability.

BUT EVEN IN ENGLAND, France and Germany, the public sector is tightening its belt. England, which has a large public deficit, has announced a large savings package that cuts the number of employees in the public sector by 490,000 through 2015. The hope is that new jobs will spring up as the economy grows.

ALL IN ALL, the situation is complex and can lead to any number of developments - commercial warfare where the US puts the brakes on China´s exports through customs duties and quotas, currency warfare in which the US demands a devaluation of the yen or substantially increases the dollar stock on the market to press down the dollar rate. In Europe, the demand for budget discipline at the national level will rise. The European Commission will work hard for the opportunity to enforce sanction measures against countries not following applicable rules and regulations for budgets and national debts, and discussions on the configuration of sanctions against transgressors continue. Public deficits have increased due to stimulants to get the economy back on its feet after the recession, and it becomes increasingly difficult to continue to stimulate the economy with borrowed money. All hopes now hinge on a rise in private consumption, but this is frustrated by high unemployment rates.

THE GLOBAL ECONOMY is characterized by imbalance. But reaching agreement on measures to restore balance is not easy, and as long as this imbalance remains, developments are difficult to determine and the risk of setback pronounced. The G20 summit in South Korea didn´t produce any solutions, but instead just very clearly illuminated the problems. What was agreed on was that there are problems that need to be rectified, but how that might be done was left up in the air. The issue was volleyed over to the International Monetary Fund and in the meantime the economies in the West and East continue to move in different directions. A global economy steered by differing national, political and financial ambitions is difficult to control.