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The imbalances were worrying, but, at least as far the surplus countries were concerned, they promised that the first shock in the case of an unwinding would be borne by the other side. It was the United States, the world’s great deficit economy, that would see its currency devalue and its interest rates surge as foreign investors abandoned American assets. It was this scenario that caused Orszag, Rubin and Senator Obama such concern. Nor were they alone.
