Is the world ready to finance a $1 trillion US current account deficit?
Brad Setser
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Dec 16, 2005
Judging from the capital inflow into the US in October, I guess the answer is yes. And I suspect the US may well give the world a chance to add $ 1 trillion to its dollar portfolio next year. That may be a strange thing to argue after the US current account deficit (somewhat unexpectedly) fell in the third quarter. But the fall reflected a couple of one offs (Katrina related transfer payments, and some more dark matter) that I don't suspect will be sustained. Register for RGE EconoMonitorsAccess to some RGE EconoMonitors, including Nouriel Roubini's Global EconoMonitor, is reserved for registered users, so sign up now to read and comment on current postings. These writings are only a small part of the insights and commentary available through RGE Monitor. Contact us today at info@rgemonitor.com or 212.645.0010 to learn more about becoming a full subscriber. |
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