Ben Bernanke, Mr Greenspan’s successor, likes to explain America’s current account deficit as the inevitable consequence of a saving glut in the rest of the world. Yet a large part of the blame lies with the Fed’s own policies, Which have allowed growth in domestic demand to outstrip supply for no less than ten years on the trot. Part of America’s current prosperity is based not on genuine gains in income, nor on high productivity growth, but on borrowing from the future. The words of Ludwig yon Mises, an Austrian economist of the early 20th century, nicely sum up the illusion: It may sometimes he expedient for a man to heat the stove with his furniture. But he should not delude himself by believing that he has discovered a wonderful new method of heating his premises.
　　Handovers to a new Fed chairman are always tricky moments. They have often been followed hy some sort of financial turmoil, such as the 1987 stockmarket crash, only two months after Mr Greenspanspan took over. This handover takes place with the economy in an unusually vulnerable state, thanks to its imbalances. The interest rates that Mr Bernanke will inherit will be close to neutral, neither restraininnor stimulating the economy. But America’s domestic demand needs to grow more slowly in order to bring the saving rate and the current-account deficit back to sustainable levels. If demand fails to slow, he will need to push rates higher. This will be risky, given households’ heavy debts. After 13 increases in interest rates, the tide of easy money is now flowing out, and many American households are. going to be shockingly exposed. In the words of Warren Buffett, It’s only when the tide goes out that you can see who’s swimming naked.
　　How should Mr Bernanke respond to falling house prices and a sharp economic slowdown when they come? While he is even more opposed than Mr Greenspan to the idea of restraining asser price bubbles. he seems just as keen to slash interest rates when bubbles burst to prevent it downturn, lie is likely to,, continue thecurrent asymmetric policy of never raising interest rates to curb rising asset prices, but always cutting fates after prices fall. This is dangerous as it encourages excessive risk taking and allows the imbalances to grow ever larger, making the eventual correction even worse. If the imbalances are to unwind, America needs to accept a period in which domestic demand grows more slowly than output.examda.
　　The big question is whether the rest of the world will slow too. The good news is that growth is becoming more broadly based, as demand in the euro area and Japan has been picking up, and fears about an imminent hard landing in China have faded. America kept the world going during troubled times. But now it is time for others to take the lead. [479 words]
　　1. America’s current prosperity can be attributed to______
　　A. high productivity growth,examda.
　　B. increased incomes of most Americans
　　C. far too much saving in the rest of the world
　　D. its extravagant lifestyle at the expense of future
　　2. Which of the following is compared to heating one’s premises with his furniture?
　　A. America’s domestic demand grows much faster than supply.
　　B. America’s domestic demand grows much slower than supply.
　　C. Americas job creation is obviously weaker than usual.
　　D. American incomes have increased much more slowly than ever before.
　　3. The imbalances of American economy______
　　A. result from the current-account deficit
　　B. result from the Federal Reserve’s policies
　　C. coincide with the handover to a new Fed chairman
　　D. are often followed by some sort of financial turmoil
　　4. It can be inferred from the text that in America______
　　A. the saving rate should be increased
　　B. the current-account deficit is sustainable
　　C. the current interest rates can help stimulate its economy
　　D. investors are eager to finance the current-account deficit
　　5. Mr Bernanke will probably manage to______
　　A. restrain asset-price bubbles
　　B. lower households’ heavy debts
　　C. maintain the current imbalances
　　D. unwind the current imbalances