A very important development: The savings surplus is being recycled by private capital and no longer by central banks

Until the 2008-2009 crisis , a savings s urplus appeared in China, other emerging countries, oil-exporting countries and Japan and was recycled to countries with external deficits, particularly to the United States, mainly by central banks and in the form of accumulation of foreign exchange reserves. This provided quite stable financing of external deficits, and mainly took the form of purchases of public sector bonds in countries posting a deficit, as well as massive money creation. Since the crisis, we have seen that there has been a savings surplus also in the euro zone, and that it is no longer being recycled by central banks, whose foreign exchange reserves are no longer increasing, but by private sector capital. This means that the financing is less stable, especially for emerging countries that have external deficits, perhaps in the future for the United States, and that it is rather taking the form of purchases of equities, corporate investment . There has also been a halt to money creation caused by the accumulation of foreign exchange reserves. So the stability and the nature of the international recycling of the savings surplus have markedly changed, in a manner that is negative for countries with external deficits, government bond markets and global liquidity growth.