Bernanke says the extremes mean 'global imbalances may reassert themselves'

From Washingtonpost.com

The United States must reduce its budget deficit and Asian nations must encourage more consumption in order to prevent a recurrence of the global imbalances that contributed to the financial crisis, Federal Reserve Chairman Ben Bernanke said Monday.

Bernanke, speaking at a conference on Asia and the financial crisis, attributed the global crisis in part to a long-standing pattern in which Asians saved too much and spent too little, while Americans spent too much and saved too little. As the global economy starts to recover, the Fed chairman said that "global imbalances may reassert themselves."

To keep that from happening, the United States must "increase its national savings rate," Bernanke said at the conference, sponsored by the Federal Reserve Bank of San Francisco. The best way to do that, he added, is to reduce the federal budget deficit.