The U.S. is accelerating and China is cooling, marking a reversal of trends that followed the financial crisis. As a result, oil is slumping as American supply rises and Chinese demand falls, capital is fleeing emerging markets, the dollar is surging, and the influence of the BRICs is on the wane.
While the biggest losers comprise commodity producers and emerging markets, Russia's Vladimir Putin is proving the most exposed. His economy is headed for recession as the plunge in crude and the ruble deepen the impact of sanctions stemming from his aggressiveness in Ukraine.
"The shifts we're seeing in the global economy show the potential for unintended consequences and unforeseen tensions," said Lena Komileva, chief economist at G Plus Economics Ltd. in London. "Emerging-market vulnerability, headlined by Russia's crisis, could trigger more safe haven flows."
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