Global balances are unbalanced

World current account deficits and superavits. G7 economies versus emerging economies, (source: FT).

When gurus like Jim Rogers and others argue that China will replace the United States as a world superpower, among other important reasons, high savings rates in emerging countries is one of then.

In the 90s, the  economic world, was more balanced, rich Western countries  finance emerging countries economies.

But surprisingly, since 2000 the world began to change completely and emerging countries with high savings rates have financed the huge western debts.

The United States and Spain have the worst World imbalances in absolute terms, but of course, that of Spain is much worse in relative terms. Current account deficit has been the indicator that we have been clearly warned of the crisis in Iceland, or the Baltic countries, therefore it’s better not forget it.

World  current account balance by countries (1980-2009).