The IMF data showed that foreign reserves denominated in the U.S. dollar accounted for 63.9% of the total by the end of 2007. When countries increase savings and if these savings are in the form of dollar denominated foreign reserves, capital will inevitably flow into the U.S..
The deleveraging process may call for capital inflow to the U.S. in the short run, but over the long run, large capital inflows are not in the interest of adjusting the economic growth model of the U.S. . Moreover, the overconcentration of foreign assets in one particular currency may end up in undesirable scenarios.