In a recent speech, former Federal Reserve Chairman Paul Volcker voiced his concerns for the future the American economy and that of the rest of the world.

Among other things, Volcker warns of a possibly dramatic shift in the relationship between U.S. consumerism and foreign investment - and the dire consequences that would have on Americans.

Some focal points of his speech:

In regard to the U.S. economy, Volcker sees "disturbing trends: huge imbalances, disequilibria, risks..."
He says these are the most dangerous economic conditions he has ever seen - and, he notes, he has seen "quite a lot."  Though businesses are rebuilding their financial reserves, in only a few years, the federal deficit
has offset all that savings.Home ownership has become a vehicle for borrowing rather than a means of financial security.
In the U.S., we consume and invest about 6% more than we produce.
The U.S. economy is held together by a foreign capital influx of over $2 billion each day.
Foreign competition has kept interest rates relatively low despite vanishing savings and rapid growth.
He says: "The difficulty is that this seemingly comfortable pattern can't go on indefinitely. I don't know of any country that has managed to consume and invest 6% more than it produces for long. The United States is absorbing about 80 percent of the net flow of international capital.
And at some point, both central banks and private institutions will have their fill of dollars.
Volcker's says that to solve the economic crisis: "China and other continental Asian economies should permit and encourage a substantial exchange rate appreciation against the dollar. Japan
and Europe should work promptly and aggressively toward domestic stimulus and deal more effectively and speedily with structural obstacles to growth. And the United States, by some combination of measures, should forcibly increase its rate of internal saving, thereby reducing
its import demand."
Volcker says "I don't know whether change will come with a bang or a whimper, whether sooner or later. But as things stand, it is more likely than not that it will be financial crises rather than policy foresight that will force the change."