The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Bond Outlook September 21st

A full 70% of the world's economic imbalance is due to overspending by the USA, and Katrina has just made the situation much worse. Will forthcoming interest increases change this?

Bond Outlook [by bridport & cie, September 21st 2005]

The US economy and the Fed have, as we expected, shrugged off the effects of Katrina, basically ignoring the longer-term impact, which we would qualify as worsening an already greatly imbalanced US and world economy. Let us hope Rita does less damage. The weekly Webcast by Roach (MSI) includes some interesting data:


  • The world imbalance as measured by the current account deficit of the deficit countries or the current surplus of the surplus countries is at an unprecedented 5% of world GDP.


  • That the USA alone accounts for 70% of the total deficit.


  • That the largest contribution to the surplus is Japan's at 15%, while China is in only fifth position at 7%.


    These data may help answer the perennial question about "whose fault is the imbalance?" Bush apologists obviously blame China. However, you do not have to be viscerally anti-Bush to observe that the 70% sticks out like a sore thumb.

    You have reached premium content. Please log in to continue reading.

    Read beyond the headlines with Euromoney

    For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


    Unlimited access to and

    Expert comment, long reads and in-depth analysis interviews with senior finance professionals

    Access the results of our market-leading annual surveys across core financial services

    Access the results of our annual awards, including the world-renowned Awards for Excellence

    Your print copy of Euromoney magazine delivered monthly

    £73.75 per month

    Billed Annually


    Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

    Sign up to any of our newsletters, curated by our editors


    Already a user?

    We use cookies to provide a personalized site experience.
    By continuing to use & browse the site you agree to our Privacy Policy.
    I agree