from Zero Hedge
The following brief comment by Morgan Stanley’s chief FX strategist Hans Redeker is one of the best summaries of the sad state the centrally-planned world finds itself in after 7 years of constant central bank manipulation to push risk assets higher no matter the cost.
Global imbalances have stayed strong but these imbalances are no longer expressed by current account differences and worries concerning foreign funding needs. Instead, current account differentials have developed into output gap differentials. Concretely, Asia’s current account surpluses have converged into supply, which within a world of demand deficiency has created overcapacity and falling investment returns.