Thomas Friedman recently told us that the world is flat. He of course was referencing the technological advances that have brought the entire world to our fingertips and knocked down the barriers that separated us in the past. If you didn’t subscribe to his observation of the world growing smaller with everything closer, you no longer have any choice. The collapse of the financial market in the US spread to the other major financial markets instantly. It spread around the world nearly as fast when the banks raised interest rates and the dollar rose on the international market.

The evidence of globalization couldn’t be stronger than in the spread of the US financial crisis. Trans nationalism has integrated the US to the entire world to the extent that it is impossible to avoid such contagion. Multinational corporations operate both in the US and out, often with the large share of their profits derived in the US. With their strongest operations, their operations in the US dropping due to the crisis, the effects spread to other nations around the world. The part in the US, usually the carrier of the company, now being carried by the rest of the company, it drags the company down, most likely more than the company can handle.

Simply put, the crisis is global and the answers are uncertain. Many have called for a world financial collaborative meeting. The issue of how to combat the crisis has many factors but most problematic is the fact that the crisis is not confined to the borders of any one nation. There is no acting entity to deal with the crisis on the global level where it is taking place. As for now, there are many singular efforts being made within many nations but they are all attempt to confront the problem within their own borders. The problem is that this is all they can do and there is nothing in place to deal with a crisis of this nature.

What needs to happen is an entity representing the international community needs to step in and take action. The problem has transcended borders and outgrew the jurisdiction of any single government and now demands collaborative efforts. The current international financial institutions, namely the World Bank and the IMF don’t have the potential for the action necessary at this time. We could expand the role of the IMF to grant them the power, both financial and legal, to take necessary action or we need to form an entity designed specifically to combat this type of problem or.

It will take a strong move from a large financial player, one that is larger than any one nation or at least stronger than the US at present. The world wide depression of the thirties provided a similar situation. At the time, Great Britain was the world’s leading economy and as such, it seemed obvious that they would bear the responsibility. As it turned out, the US, having prospered greatly in production during WWI, was the largest holder of assets. The present situation is similar though played out by different characters. Today, the US seems the obvious bearer of responsibility but with the financial sector hastily propped up on emergency loans made within a failed economic system, they don’t have the assets. The model demands that the world looks then to the current largest holder of assets; China.

Less than ten years after hearing lectures from top US officials about having to open their economy and detach their currency from the dollar, China now holds most of the US’s national debt and has the best trade deficit in world thanks to their mercantile economic model. As such, they would be the best candidate to champion a new international monetary entity designed to correct the current economic crisis and combat future recurrences.

For them to agree to do such a thing, they will need reassurance that their interests will be considered in future policy. They will have to be granted a strong voice and be reassured that their input will be taken seriously and carry appropriate clout. That being said, the IMF would have to be restructured giving a proportionate amount of influence in accordance to input, hence allowing new nations more voice. The other option would be creation of an entirely new entity in which China would be a center player and would hold the largest share of influence.

It is an unprecedented time in the lives of the living American people. The younger generations have never know anything other than the best and will now have to get used to competition and especially sharing the wealth. Many things are uncertain but change is sure to come. Whether it be for the better of for the worse will depend on what happens now and how willing American powers are to collaborate with others. This is not necessarily the end of the American Century but it carries the potential. We can only hope that the goodwill we have tried to spread throughout the world will not be overshadowed by the ill-intentions of some of our past leaders.