As countries throughout the globe undergo radical economic changes from the impact of globalization, there exist two major imbalances in the world today.
The first imbalance is of course the one arising from the huge current account deficits the United States continues to run. It has not created serious chaos at the moment because the massive influx of funds from around the world allows the U.S. to make up for the deficits. However, there is no guarantee this will continue, given the continuing expansion of those deficits each year.
There are three factors that need to be considered when gauging the risks these imbalances pose to the global economy.