The ongoing financial crisis is linked to the U.S. current account deficit, although not ultimately caused by it. Reducing the American external deficit will require further decreases in the value of the dollar, which will in turn boost net exports.

Nevertheless, the end of the greenback as the world’s reserve currency is not in sight. The dollar has, in fact, benefited from the financial crisis, and a current account crisis is not likely at the present time. However, foreign reliance on American financial markets will fade, which presents the U.S. with the pressing task of resolving both problems.