ARTICLE: "World Economy in Flux As America Downshifts: Huge Trade Gap Narrows As Dollar, Housing Slide; Exporting Lobster Traps," by Michael M. Phillips, Wall Street Journal, 20 September 2007, p. A1.

ARTICLE: "Dubai Exchange Vies for Global Role," by Aaron Lucchetti, Alistair MacDonald and Jason Singer, Wall Street Journal, 20 September 2007, p. C1.

The opening paras made a powerful observation:

For years, economists have warned that the U.S. can't run up endless charges on the national credit card to cover its huge appetite for imported cars, oil, electronics and other goods. Someday, they said, the bill will come due.

It looks like someday may have finally arrived.

After 16 years during which the U.S. mainly borrowed and bought while much of the rest of the world lent and sold, the global economy appears to be undergoing a fundamental shift. American exporters are finding eager overseas markets for their products, U.S. consumers are beginning to temper their free-spending ways as the housing boom turns to bust. China, the Middle East, central Europe and Africa are absorbing more of the world's imports. The result: Instead of depending as heavily on the U.S. for demand, the world economy could become more evenly balanced.

The slow "decline" of the dollar is a very good thing.

In 2000, the U.S. absorbed almost one-fifth of the world's imports. Now it's under 15%. Meanwhile, the New Core emerging markets (Brazil, South Africa, India, etc.) are now up to 40 percent of import consumption, a significant rise from 28% in 1991.

The rebalancing is more natural and less painful than predicted, so long as the slide goes slowly.

Meanwhile, we watch Dubai continue to weave its way into global financial nets. A three-way deal brewing between Bourse Dubai, Nasdaq and a Nordic exchange operator will end up giving Dubai a minority stake in the London Stock Exchange. The link-up "would create an exchange group with business that stretches through three regions: the U.S., Europe and the Middle East."

Western exchanges are keen to expand their business in the Middle East, where capital markets are developing fast amid high oil prices and changes in corporate governance and regulation.

Again, it's not the slowing of globalization that challenges us, it's how fast it continues to proceed. But the self-balancing is encouraging. The unsustainable is naturally corrected, because the feedback loops are real and functioning.