Guest post: PonziFinance
What is not understood (even by trained economists and strategists and investors) is an accounting identity that follows from basic double entry book keeping (invented in the 14th century AD and the basis for all book keeping in the world now), which rearranged states the following:
(I-S) + (G-T) + (X-M) = 0 where I = Investment, S = Savings, G = Government Spending, T = Taxes, X = Exports, M = Imports
Looking at the attached chart for the US over the past 60 years confirms this (watch the changes prior to and after 2008 carefully). Over time, we will look at other conditions and constraints that are attached to this basic accounting identity (before you ask, no, the US government cannot run deficits into eternity without other consequences!).