My Copernic Tracker follows changes on home web sites of economists I like to read. It signalled that MIT Olivier Blanchard published a new article , an introduction to Brender, Pisani book on global imbalances. A quote:

“Sooner or later, the flows of funds to the United States will slow, and the US current account deficit will have to decrease. Indeed, eventually, the US trade deficit will have to turn into a surplus. How far in the future? My own sense is that much of it will have to happen over the coming decade: Chinese saving will decrease: The political pressure on the Chinese government to provide better insurance and health care is growing. As safety nets are improved, saving will decrease, domestic demand will increase. To control total demand, the Chinese government will let the RMB appreciate, reducing the Chinese current account surplus. The Asian financial system will improve, leading to higher investment. The US budget deficit will be reduced. Central banks will increase the proportion of non-dollar assets in their reserves. Euro markets will become more liquid and deeper, making Euro assets relatively more attractive for financial investors. All these factors will lead to a change in the configuration of saving and investment around the world, and to a decrease in US deficits. As this happens, we shall see a steady depreciation of the dollar, an appreciation of the RMB, and a likely appreciation of the euro and the yen. If this happens smoothly, central banks can handle the adjustment through interest rate changes. Will it happen smoothly, or will investors panic? One would be foolish to give an answer with much confidence, but my bet is on a slow and steady adjustment.”