AP Photo

A few years back, before this crisis erupted, several economists were concerned about the sustainability of the large global imbalances fueled by the so-called Bretton Woods II system. These economists recognized, in the tendency of export-led economies to manage their exchange-rate systems, the origin of large trade and current account surpluses that, via large foreign reserve accumulation, were financing the mirror image of those surpluses, namely the large U.S. trade and current account deficits.

These surpluses, primarily in several export-led Asian economies and also in oil-producing countries, ballooned to extensive proportions in 2007 and 2008. The purchases of U.S. government bonds by these investors helped keep long-term interest rates low and led many investors to seek...