The article “Revenge of the Glut,” was written by Paul Krugman of The New York Times. Mr. Krugman attempts to explain how the present global debt crisis unfolded and not only are Americans under duress, but other important global markets are being hit hard as well. Mr.Krugman and the Federal Reserve chairman Mr. Bernanke both state that Asia is the cause. According to the speech, titled “The Global Saving Glut and the U.S. Current Account Deficit, spoken by Mr. Bernanke four years earlier, when the Asian markets began to tumble in 1997-1998 they "began protecting themselves by amassing huge war chests of foreign assets, in effect exporting capital to the rest of the world." He then states "the result was a world awash in cheap money, looking for somewhere to go." For a while, the inrush of capital created the illusion of wealth in these countries, just as it did for American homeowners. Asset prices were rising, currencies were strong, and everything looked fine. But bubbles always burst sooner or later, and yesterday's miracle economies have become today’s basket cases, nations whose assets have evaporated but whose debts remain all too real. And these debts are an especially heavy burden because most of the loans were denominated in other countries' currencies." Mr. Krugman wrote this article to explain to the American people how this “global crisis” started.
