"The central issue on which this paper focuses is the failure of high net savings by the "savings glut" countries to lead to fruitful investment in other countries, both in the United States and in developing countries." -- Abstract

We argue that a chronic US current account deficit is an integral and sustainable feature of a successful international monetary system. The US deficit supplies international collateral to the periphery. International collateral in turn supports two-way trade in financial assets that liberates...