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The more I think about that BCA article, the less convincing do I find its main conclusion.

OK, foreigners are holding vast amounts of US dollars. There are many things they can do with those dollars, e.g.

1. Continue to hold them
2. Buy other currencies to hold
3. Buy precious metals
4. Buy consumer goods
5. Buy capital goods
6. Buy debt
7. Buy equities
8. Buy real estate

Possibilities 1 and 2 do nothing to alleviate the US current account deficit or help the US economy in any way. The other possibilities help us, or might help us, only if the foreign buying is from or in the US. If much of the buying is from countries other than the US, then a necessary intermediate step is to sell US dollars for other currencies. That is almost certain to put downward pressure on the exchange value of the US dollar.

I haven't thought through all the possible ramifications of all those dollars saved up by foreigners, but I do think that the eventual consequences are not necessarily good for the US. The 'eurodollar' glut of the 1960s and 1970s certainly was not good for us.
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