Global economy at risk as U.S., Europe and Asia slow

Published Jun 4, 2012 at 10:00 am (Updated Jun 4, 2012)

The global economy's foundations are weakening, one by one. Already hobbled by Europe's debt crisis, the world now risks being hurt by slowdowns in its economic powerhouses. The U.S. economy, the world's largest, had a third straight month of feeble job growth in May. High-flying economies in China, India and Brazil are slowing, too. Fears of a global economic downturn have sent investors rushing toward the safest possible investments: U.S. and German government bonds. As a result, the interest rate on the 10-year U.S. Treasury note has hit a record-low 1.46%. The rate on the German 10-year bond is even lower: 1.17%. "Treasurys are at 1.46 because people are freaking out," says Mark Vitner, senior economist at Wells Fargo Economics. The gravest fear pertains to Europe. The most urgent threat is that in mid-June, Greek voters will reject the terms of a $170 billion bailout—which calls for painful budget cuts—and abandon the euro. The move could ignite economic and financial chaos as Greek debts shift from denominations in euros to Greek drachmas of uncertain value. Yet the global economy's troubles go well beyond Greece. For a detailed look at the global economy's vital signs by country, as compiled by The Associated Press, read the full story here.