The result is that overdraft credits to the Greek central bank have grown by nearly 1 billion a day in recent months. If Greece defaults and leaves the eurozone, these overdrafts will not be repaid.

For them, the Chinese current account surplus and its mirror image, the US current account deficit, are the central problem.

An increase in gold imports placed further pressure on the current account balance.

These countries combined current account deficit matches Germany s surplus almost exactly. (The eurozone s aggregate current account with the rest of the world is balanced.)

As these countries posted current account deficits, northern European countries accumulated current account surpluses, exposing a widening competitiveness gap.

And with that lower saving rate will come a smaller current account surplus.

What makes this perverse is that Germany runs a huge current account surplus.

Germany had a current account surplus of 2.1 of GDP at the time, while Japan s was 4.4 .

China and India Exposed

Much is made of Germany s large current account surpluses.

Germany now has a current account surplus of about 215 billion a year, while the rest of the eurozone is running a current account deficit of about 140 billion.

Germany s enormous current account surplus aggravates their problems further.

Thus, in order to keep the current account deficit stable, the trade deficit must shrink.

The current account deficit has been almost eliminated, and the banking crisis contained.

In Spain, the counterpart to the current account deficit was private sector borrowing.

Since a country s current account surplus is the difference between its national saving and its national investment, China s current account surplus is likely to continue to shrink in the coming years.

Third, the net flow of capital is from emerging markets to the US this is what it means to have current account surpluses in emerging markets and a deficit in the US.

The counterargument hinges on the difference between the current account deficit and the trade deficit.

The ensuing loss of competitiveness manifested itself in large and growing current account deficits and slowing growth.

Moreover, the aforementioned developing economies all have one thing in common large current account deficits.

They argue that current account balances reflect national savings and investment rates.

Voilà a successful short trade.

Shorting Fiscal Consolidation

The world s current account balances must ultimately sum up to zero.

Global macroeconomic stability requires that we avoid such large current account imbalances in the future.

In the last 60 years, the US has underpinned global growth by running persistent current account deficits.

For a few years, imports surged, and by 1995 a sizeable current account deficit had developed.

The problem of current account imbalances is closely linked to the existence of a world savings glut.

The US current account deficit has been narrowing in recent quarters, thanks to export growth.

SINGAPORE These days everyone seems to want to run a current account surplus.

The resources of the Special Account amounts shall be at least 20 times the annual administrative account derived from sources indicated in paragraph 2 under the coordination of the host country.

On top of this is the almost certain unwinding of global current account imbalances.

An economy s current account is the difference between its investment rate and its savings rate.

Leading Bush administration officials used to talk of the US current account deficit being a gift to the outside world.

Indeed, America s current account position strengthened despite the dollar s appreciation in the face of safe haven demand.

The larger deficits would also eliminate all of the excess saving that now underpins the current account surplus.

Indeed, the world itself cannot afford the disappearance of the US current account deficit at least not quickly.

This outlook for the current account balance does not depend on what happens to the renminbi s exchange rate against other currencies.

Rwanda s current account has deteriorated steadily, with the deficit now exceeding 10 of GDP.

The second reason is that nothing has been done to address the problem of current account imbalances.

Perhaps the most notable consequence of Spain s recent reform efforts is its current account surplus the country s first in more than two decades. At the peak of the crisis, Spain s current account deficit amounted to an unprecedented 10 of GDP.

The US unemployment rate has declined to around 7.7 and the current account deficit is close to 500 billion, while eurozone unemployment is at a record high, near 12 , and the current account shows a surplus approaching 100 billion.

Since the Vietnam War, US budget deficits, money creation, and current account deficits have often been high.

The independence of the central bank and the no overdraft rule for budget financing will almost certainly prove too restrictive to carry out critical peace supporting activities in Afghanistan.

Much of this rise stems from growing prosperity and current account surpluses in middle income countries.