Too Much Money

Lots of people worried for years that the gigantic trade deficits the U.S. ran up with first Japan and then China were hurting domestic manufacturers. But the flip side of those trade deficits — gigantic capital flows into the U.S. — may have been even more dangerous. It was the capital gusher from China in particular that inflated the 2000s real estate bubble.

See pictures of the global financial crisis.

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