Instead, a careful look at the published data reveals that differences in the three characteristics of U.S. claims and liabilities that I just discussed – returns, composition, and size –contain the key to understanding these apparently anomalous results and, hence, that the United States faces a “reality” similar to that of other countries. Puzzle 1: Do foreigners pay to lend to the United States?
But broadly speaking, this evening, we can feel proud that we have together navigated rather well, by judicious piloting, and perhaps a slice of good fortune, the turbulent waters of the economic and financial mayhem of the past few years, that has so troubled the western world and so many of its principal trading partners.