by Jerome a Paris
Wed Mar 29th, 2006 at 05:24:08 AM EST
Martin Wolf says that complacency about global imbalances is growing (bears have been crying wolf for too long and are discredited), but is deeply misguided.
His argument is summarised by my title, and nicely supplemented by the above graph, which show (despite improper use of different scales) that the problem of US indebtedness has been growing in terms of its actual weight on households - and that even before the recent interest rate increases by the Fed weighed in.
Current "growth" is, quite simply, unsustainable. A lot of things are, it seems. It increasing looks like we are in the last gasps of a massive, and ugly, orgy.