improved monetary frameworks and credibility, the impact on short-term interest rates, growth and inflation has been smaller than before, while deeper financial integration may facilitate the persistence of deficits...
Bless is the borrower, for it keeps the world humming. When oil-exporting countries are trying to accumulate claims on the rest of the world, as they are now, it is good that the dominant supplier of the desired claims are not uncreditworthy oil-importing developing countries borrowing in foreign currencies, but the US borrowing in its own. This is a big improvement over the 1970s. Moreover, because high oil prices must generate higher deficits in oil-importing countries, the sustainable size of US current account deficits and liability accumulations has risen. The assumption that US deficits need to fall drastically makes less sense in our post-oil shock world.
Yet, if oil exporters, advanced countries (excluding the US) in aggregate and China, the world's most dynamic country, run large current account surpluses over a long period, the accumulation of liabilities by the US will be massive. The US is the world's most creditworthy--and so most satisfactory--issuer of claims. For this reason, its role as borrower of last resort has helped explain the absence of any economic downturn this time. But, as the recent market turmoil suggest, even its back is not infinitely broad. Other creditworthy countries should share the load.
+ Iowa Co. Hopes to Make Gasoline Obsolete. I thought this would be about ethanol, but it's about hydrogen.
+ I'm playing around with Google Video, a little, finally. Downloaded the new, free Pearl Jam (it's ok) and watched the Colbert roast of President Bush that been all over the place. Also ok.
I'd think it'd be hard to take something like that, non-stop, for 20+ minutes, graciously. The twins looked less than thrilled around the 9-minute mark.
And then, that clip at the end: that wasn't funny.
Now the Bush impersonator, where he's working together with Bush to make fun of himself and the press corps, that's funny.
And they got a standing o. Our president can laugh at himself. That's a good thing.
My final word on Google Video: Dang, TV is slow. Don't expect many more of these reports ;-)