>Savings are low (if you ignore retirement savings, which I don't,
>but others do).
That's not true. Pension contributions count as savings. Are you talking about capital gains?
> So what?
Domestic savings are insufficient to finance domestic investment and consumption, meaning large and sustained foreign borrowing. That's not, to use the word we liked in the Party of the Right, sound.
> > How likely is it that people are going to start betting
> > en masse against the dollar?
>What, and bet *for* the Euro?
That's not implausible. Europe is in the early stages of a corporate restructuring that could be very nice for shareholders. Regardless of that, the euro's virtue is that it's the non-dollar - financial markets that will soon be as lusciously deep as the dollar markets. It wouldn't take that much of a portfolio shift to cause the U.S. trouble. If the U.S. were a normal country, the combination of chronic current account deficits, large and increasing foreign debt, would be signs of impending disaster. But the U.S. isn't a normal country.