Billmon: The Chicken and the Egg

(First in a series)

If you’ve been following the debate over the increasingly out-of-whack global financial system – and whether it will end in a soft, hard or crash landing for the U.S. economy – you may want to take a look at (www.roubiniglobal.com/archives/2005/05/global_imbalanc.html) by economist Nouriel Roubini.

It isn’t an easy read, especially if you’re not fluent in econospeak. But it does a very good job of laying out the different schools of thought on the issue -- or at least the ones most frequently heard in the corporate media, on Wall Street and at the Fed.

As Roubini notes, these views are so contradictory that the resulting babble of voices can be compared to the movie Rashomon, in which the story of a terrible murder is repeated from point of view of three witnesses and the murderer himself – with predictably confusing results. Although if Kurosawa really had made a movie about the U.S. current account deficit, I’m sure it would have been a lot more interesting – with maybe a bloody sword fight between competing gangs of Ronin central bankers. (Or Alan Greenspan running around without any pants on, like the crazy guy in Seven Samurai.