{"id":72440,"date":"2009-12-09T04:39:00","date_gmt":"2009-12-09T09:39:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/global-imbalances-next-crisis-2009-12"},"modified":"2009-12-09T04:39:00","modified_gmt":"2009-12-09T09:39:00","slug":"the-global-rebalancing-nightmare-has-yet-to-begin","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/72440","title":{"rendered":"The Global Rebalancing Nightmare Has Yet To Begin"},"content":{"rendered":"

\"AEI<\/a>Prior to the financial crisis, “global imbalances” — primarily large American budget and trade deficits financed by foreigners — were considered a potential trigger for a coming global financial crisis.<\/p>\n

But the nightmare scenario scenario of foreign investors’ shifting preference away from the dollar forcing devaluation or interest rate hikes didn’t happen.<\/p>\n

In fact, U.S. debt securities were snapped up by international investors during the height of the crisis.<\/p>\n

So, can we forget about scary “global imbalance” caused-crises?<\/p>\n

Nope.<\/p>\n

Free market think tank AEI hosted an event on the the subject, “Global Imbalances: The Next Crisis?<\/a>” featuring University of Virginia economist Frank Warnock’s assessment of the the continued threat.<\/p>\n

“As it turns out we did have a crisis but not the global imbalances crisis,” said Warnock. Yet Warnock’s research on American debt says that imbalances remain important. Reserve accumulation and global investors’ preferences could more likely prolong, rather than end, financial imbalances, he says<\/a>.<\/p>\n

SEE WARNOCK’S PRESENTATION WARNING ABOUT GLOBAL IMBALANCES>>><\/a><\/h1>\n

Join the conversation about this story »<\/a><\/p>\n

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