I suspect most people who read this blog also read Nouriel Roubini’s blog, and probably David Altig’s blog as well. So the Roubini/ Altig debate over the risks associated with foreign central bank financing of the US twin deficits in this week’s edition of the Wall Street Journal’s Econoblog is probably old news to most of you.
Nouriel certainly generated the more colorful metaphors. "Hot rotting potatoes" = the dollar-denominated debt that the US needs to sell abroad to finance its ongoing deficits.
Check it out.