The risks of ongoing imbalances

As the global economy struggles against the risk of a relapse, the same old external problems continue to rear their heads. In particular, despite some movement as the recession effects began to bite, the global economy is still characterised by massive trade imbalances, and to some extent this is down to exchange rate regimes. Even though the counterparty of capital flow acts as a counterbalance and allows trends to be sustained for prolonged periods, the subsequent build-up of liabilities can