The international dollar standard is malfunctioning. Near zero U.S. short-term interest rates launch massive hot money outflows by carry traders into emerging markets (EM) in Asia and Latin America. Each EM central bank buys dollars to prevent its currency from appreciating but loses monetary...

In the United States, both private and governmental saving dropped sharply after 1980 in contrast to the preceding postwar decades. But investment in the America economy has held up quite well (except for the 2008 banking crisis) because of heavy borrowing from foreigners as manifested in the...