It never fails. Every presentation or speech I have made on the economics of global rebalancing over the past three and a half years almost always ends with the same question: "When will these adjustments ever occur?" The history of the past few years is littered with false alarms over the coming US current account adjustment. Call it the "boy-cries-wolf syndrome". The longer the world endures mounting imbalances without suffering any serious consequences, the more the financial market consensus believes this disequilibrium is sustainable.

Yet there are new and increasingly urgent grounds for concern. Global imbalances continue to compound at an alarming rate. But there is a dangerous asymmetry in the mix of these imbalances. America's record current account shortfall will account for about 70 per cent of the total deficit positions in the global economy in 2005. By contrast, the incidence of surpluses is far more diffused: it takes some 10 economies to account for 70 per cent of the total global current account surplus in 2005. The world, in effect, is balanced on the head of the US external-imbalance pin. Washington is quick to point the finger elsewhere in blaming a growth-starved world for these imbalances. But in the end there can be no mistaking the disproportionate share of the blame that falls on a US economy that is short of savings.