Quilter Investors' Lindsay James: Investor vigilance needed as era of US advantage erodes

Reserve currency status 'not immutable'

clock • 3 min read

All eyes are focusing sharply on the rising costs of US government debt.

Investors are having to weigh up whether recent earth tremors in bond markets are a warning of something of greater magnitude ahead or simply the rumblings of a system that has seen peacetime debts reach levels previously only seen in times of war.   The US stands as the world's largest debtor nation, with a national debt exceeding $34trn and a current account deficit that continues to widen. Persistent trade deficits, a low national savings rate, a high fiscal deficit and a strong dollar are all contributory factors, exacerbated by double-digit savings ratios in China and the eurozon...

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