A Tale of U.S. Rebalancing, a Looming Liquidity Crisis and the Yuan's Arrival

In 2014, the U.S. economy made a U-turn that is set to shape a new world order. The U.S. Federal Reserve stopped buying T-bonds, the U.S. dollar has been rising, the pre-crisis bloated external current account deficit shrank by 58 percent and the rate of unemployment is at 5.8 percent.

This picture shows that the global financial crisis, at least in the United States, is over. Some powerful factors have played in its favor: investments in the oil and shale gas industry, and a shrinking current account deficit, which hit a 16-year low of 1.9 percent of GDP this year. The effects of the energy boom and cheaper energy, notably natural gas, and the rally in global equities generated by the Fed's third wave of quantitative easing – which boosted investment income – have aligned to realize the dream of a U.S. manufacturing renaissance. This crowning achievement is estimated to cut imports and boost exports.