Bernanke: US Must Save More, Asia Spend More

The world economy is headed back down the drain if Asians don't start spending more and Americans don't start saving more, Ben Bernanke said at a conference yesterday. The Fed chief warned that unequal trade patterns were partly to blame for the financial crisis and that they are re-emerging as Asia leads the global recovery, reports the Los Angeles Times.

Export-driven growth has helped Asia rebound, Bernanke said, but more needs to be done to keep imbalances in check. Bernanke said American policymakers needed to develop a "fiscal exit strategy" to start reducing the budget deficit, warning that doing so is "critically important to maintain confidence in our economy and confidence in our currency." (More Federal Reserve stories.)