Financial level off

Coping with just these changes—and threats—would be
enough for any investor. But there are more to come, even as millions
of Americans struggle just to earn back what they lost in the
first few years of the new century.
There is the next economic downturn, which, with inflation
in check, could threaten to tip the country into a bout of deflation,
a malady that sent Japan’s economy into a 1990s tailspin
that has only recently begun to level off.
There are the twin deficits—the current account deficit and
the federal budget deficit. The current account deficit is the total
of the “borrowing” from abroad Americans have done to buy all
they have wanted. At more than $800 billion, the current account
deficit is the largest it has ever been. Its unwinding could, at its worst, push up interest rates, send the value of the dollar down
sharply, and trigger another economic downturn.