Tuesday, November 23, 2010

The Global Imbalance Shuffle

Add "global imbalances" to the list of things we are supposed to be worried about.

And as China's surplus builds, nations like the United States that are running trade deficits also face risks. Consistently consuming more goods and services than the nation produces means the country needs to finance that deficit by selling assets, such as U.S. Treasuries, to their overseas trading partners.

"Eventually, the rest of the world will refuse to lend to us the money we need to keep consuming and then we'll go through a very tough recession," said Jay Bryson, global economist with Wells Fargo Securities.

If your list of worries isn't growing, you're just not paying attention to the news headlines.

If I sound cynical, it is because it's all getting a bit thick.

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