In my last post, I cited Jeff Frankel's keynote speech from a recent Bank of Canada-ECB workshop. He also pointed to the end of "Exorbitant Privilege" and "Dark Matter", and other arguments of American exceptionalism. I think we'll see resounding evidence of this in Friday's release of the US end-2008 Net International Investment Position (NIIP).

First, recall nearly two and a half years ago, I posted this figure...

Figure 1: Net International Investment Position, end-year (blue squares), and Cumulative Current Account balance on a NIPA basis (red line), as a ratio to GDP. NBER recession dates in gray shading. Sources: BEA International Investment Position release of June 2006, BEA NIPA release of October 2006, NBER, and author's calculations. Originally posted here

...and asked if "gravity can be defied?" At the time, I argued the answer was "no", and observed that NIIP reversion to

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I've just come back from two weeks on the road, during which time I attended a couple of conferences. The first conference (NBER International Seminar on Macroeconomics) dealt with issues of exchange rates, reserve accumulation and financial crises (more on that later). The second one, a joint Bank of Canada-ECB workshop (not online), focused on exchange rates in the global economy. At the latter, Jeff Frankel delivered the keynote speech, entitled "On Global Currency Issues", in which he outlined what's "out" and what's "in" in international finance. One of the phenomena he concluded was no longer relevant was "the global saving glut".

I still wonder whether there ever was a global saving glut. In part, the question hinges on one's view of what the nature of the glut. Was it world saving was higher then they it had been before. That patently was not true (and will be even

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