I disagree with Michael Mandel on the US current account deficit - I think it is a concern, he doesn't.  We also disagree on the US fiscal deficit.   He doesn't think it is a big problem; I disagree.  If US households don't save, the US government cannot run a fiscal deficit without adding to the overall national savings shortage, and a worrying large current account deficit.

But we agree that the rapid expansion of credit inside China over the past few years poses a serious risk to the long-term health of its financial system. I just finished a paper that looks at China's financial vulnerabilities and tries to relate them to macroeconomic developments inside China over the past few years - soaring savings, soaring investment, soaring bank lending, soaring foreign currency reserves, soaring exports and the like.