... therefore requiring either reduction in other current account outflows to balance it within the current account, or else an increase in capital account inflows ... as they say, "recycling the oil wealth".

For those who don't recall the debt crises of the 80's ... the push to recycle the current account surpluses of the OPEC oil exporters in the later 70's was a big part of laying the foundation for the debt crises of the 80's.

The first cabs off the rank in that series of debt crises were those developing nations like Brazil that has a strategy of relying on heavy foreign borrowing, where the knock on its current account from the oil price shocks suddenly left it unable to service its overseas obligations. But the push to recycle oil incomes made that worse as well ... when Brazil was in the stage of borrowing to meet existing debt obligations, the push by major money center banks looking to attract oil country funds by offering high returns meant that Brazil was able to dig itself far deeper into a hole than it should have been able to do.

The big change now is that we have just gone through a big wave of the same thing, except this time recycling the profit income gained by appropriating basically all productivity gains for nearly a decade, rather than splitting them with labor roughly 50:50 as under the Fordist regime. How the challenge of recycling oil incomes is going to work out in the current climate is anyone's guess.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.