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Australia sat out the global economic crisis as much as any major economy could. Thanks to mining wealth and ripple effects from China, Australia has seen strong growth while trading partners in the West have struggled. But Chinese economist Andy Xie , Director at Rosetta Stone Advisors , warns that Australia may be due for a financial crisis of its own in the coming year. Writing at The Big Picture , Xie outlines the threat to an economy that may have become too closely tied to China's fortunes and easy credit: The Australian economy has boomed more than any other developed economy over the past decade. Its nominal GDP has doubled in a decade, and its currency value against the U.S. dollar has doubled too. As a result, its per capita income is much higher than in the United States or Europe. Its property is the most expensive among developed economies. The price of its main export, iron ore, appreciated ten times at its peak, which justified some of its prosperity. Foreign investment in its mining sector has played a more important role. It has caused the Australian dollar to appreciate strongly despite its current account deficit and higher inflation than elsewhere. The strong currency has attracted financial capital from retail investors in China and Japan. The snowball effect on the financial side has made the Australian economy strong despite the recent tumbling of the price of iron ore. As mentioned, the investment flow is sticky due to the long cycle of mining asset development. So much capital inflow has pumped up Australia’s monetary system, creating an environment of easy credit. This is the factor behind the real estate and consumption booms. If capital inflow is a bubble, Australia’s property market must be a bubble, too. When the capital inflow reverses, the bubble will pop. The Australian economy is probably a bubble on top of China’s overinvestment bubble. The latter’s unwinding will sooner or later trigger the former to do so, too. Among the mining investors I have met there is strong hope that China would soon introduce a stimulus like in 2008. This is why the price of iron ore has rebounded by 40 percent recently. Bottom fishers came in to speculate on China’s possible stimulus before or soon after the 18th Party Congress. They are likely to be disappointed. The last stimulus has made the overinvestment situation so severe that another round is just plain wrong. Also, it would trigger severe inflation and currency devaluation. I just don’t see it happening. Read A Hard Landing Down Under here .

With the U.S. economy effectively stalled, Boston Fed President Eric Rosengren is calling for the Fed to do more to spur economic growth. In an interview with the Binyamin Applebaum of the New York Times , Rosengren, who is not currently one of the voting member of the Federal Open Market Committee (the five voting slots rotate among Fed branch presidents), called for the Fed to buy more mortgage bonds and Treasury securities. And then buy some more. Until... “You continue to do it until it’s clear that you’re no longer treading water,” Mr. Rosengren said in an interview. “You continue to do it until you have documented evidence that you’re getting growth in income and the unemployment rate consistent with your economic goals.” The government estimated that payrolls increased by 163,000 in July, more than in the last several months and more than analysts had predicted. But Mr. Rosengren emphasized that several indicators, including the unemployment rate and the share of the population in the work force, had retreated to their levels at the beginning of the year. “For the last seven months we’ve been treading water. That’s different from what we expected at the beginning of the year,” he said. “I think it’s time to swim to shore.” Read Fed Officials Underscore Divisions Over Action here .

In Europe, all eyes are on Thursday's pending announcement from the European Central Bank on policy moves to halt economic slowdown. That the ECB will cut interest rates below 1% for the first time seems to be accepted. But that may not be enough, as Paul Carrel reports for Reuters . Whatever the ECB decides to do will have an impact on markets globally, and on the U.S. economy. The Wall Street Journal 's Brian Blackstone discusses the potential ripple effects of the ECB's moves:

We're always on the lookout for different approaches to telling recent economic history. The spring 2012 issue of Good magazine features a fairly concise history, using a mix of text from Tim Fernholz and great visualizations from Dylan Lathrop . The feature presents the before, during, after, and future of the global economic crisis. And a lot of Lathrop's visualizations are simple, but useful, timelines. Here's one sample: Read It's All About the Benjamins here.

In his latest book, The Price of Civilization: Reawakening American Virtue and Prosperity , Jeffrey Sachs calls on Americans to recognize that we are connected to other countries' problems in direct ways, and that our behavior as consumers and citizens have a significant impact on global development. And he offers up his prescription for working toward a cure to the global economic crisis. He discussed the state of the global economy, and specifically the euro-zone debt crisis, in an interview with Parminder Bahra of the Wall Street Journal:

In the period before the global economic crisis of 2008, Nouriel Roubini was tagged "Dr. Doom" by many media outlets. The label was often dismissive, but it became more of a badge of honor after crisis hit. Roubini has remained vigilant about the vulnerability of the financial markets. His concern now is a global depression. In order to avoid depression, Roubini says there must me a multi-national approach. While austerity measures in many countries are necessary, he argues that other nations must postpone austerity in order to inject stimulus into the global economy. Writing at Project Syndicate , Roubini outlines several other steps: Second, while monetary policy has limited impact when the problems are excessive debt and insolvency rather than illiquidity, credit easing, rather than just quantitative easing, can be helpful. The European Central Bank should reverse its mistaken decision to hike interest rates. More monetary and credit easing is also required for the US Federal Reserve, the Bank of Japan, the Bank of England, and the Swiss National Bank. Inflation will soon be the last problem that central banks will fear, as renewed slack in goods, labor, real estate, and commodity markets feeds disinflationary pressures. Third, to restore credit growth, eurozone banks and banking systems that are under-capitalized should be strengthened with public financing in a European Union-wide program. To avoid an additional credit crunch as banks deleverage, banks should be given some short-term forbearance on capital and liquidity requirements. Also, since the US and EU financial systems remain unlikely to provide credit to small and medium-size enterprises, direct government provision of credit to solvent but illiquid SMEs is essential. Fourth, large-scale liquidity provision for solvent governments is necessary to avoid a spike in spreads and loss of market access that would turn illiquidity into insolvency. Even with policy changes, it takes time for governments to restore their credibility. Until then, markets will keep pressure on sovereign spreads, making a self-fulfilling crisis likely. Agree or disagree with Roubini, by proposing specific steps, he does allow for a meaningful discussion. Two big questions raised by his proposals are 1) is a coordinated global policy possible in today's political climate, and 2) if so, then how might it come about? Read How to Prevent a Depression here .

Bloomberg's Hans Nichols reports that Roger Altman is being considered to replace Lawrence Summers as the director of the President's National Economic Council . We remember Altman as Deputy Secretary of the Treasury during the first two years of the Clinton Administration. Now he is chairman of Evercore Partners , the investment banking boutique that he founded. As we were looking for more information on Altman, we came across this interview with Charlie Rose from July 2009. In this excerpt, Altman is discussing the deficit and some of the other key issues he will have to consider if he does end up as a key adviser to President Obama: Watch the full interview here .

The Federal Open Market Committee is set to meet tomorrow to discuss the state of the US economy and ways to push recovery. The Financial Times is now reporting that the Fed will "downgrade its assessment" of the economy . So that opens up questions of what tools the Fed may use to stimulate the sluggish recovery. Will the Fed be able to inject additional fiscal stimulus measures? Is additional quantitative easing a possibility? The University of Oregon's Tim Duy is expecting a "small change." Bottom Line: The incoming data appears largely consistent with the Fed's priors - especially expectations of glacially slow improvement in the labor market. Yet the probability of any upside risk to the forecast have diminished markedly. The V-shaped recovery has not emerged. The elimination of that upside risk argues for additional easing, but the Fed appears hesitant to do more. Uncertainty about the effectiveness of additional easing argues against more action, especially given relatively quiescent financial markets and positive, albeit lackluster, growth. Moreover, any additional action now is essentially a promise to do more later, even if growth remains along its current trajectory. All of these points argue against additional easing tomorrow, and that remains my baseline scenario. The case becomes muddied by internal, staff level pressure to do more now, combined with rising expectations of imminent easing given the steady flow of leaks to the press. This opens the possibility of a small policy adjustment that eliminates that passive reduction of the balance sheet. Any more is off the table. Read Tim Duy's Fed Watch here .