The Future of Global Trade and Capital Flows

I'm pessimistic about trade because the historical precedents are pretty clear. Under this kind of global demand contraction, there's a tendency for trade disputes to get very nasty. Europe is hoping to be able to resolve its own domestic imbalances by significantly increasing its current account surplus and forcing its imbalances on to the rest of the world. Japan is in a similar position. They need to keep their current account fairly strong. The U.S. is trying to bring down its current account deficit because it's been excessively high for too long. I think everybody needs the same thing. And that's the formula for trade war and currency war, and I think that'll continue.