US deficits risk crash: Australian Treasury

[TreasonousBastard]

http://www.theaustralian.news.com.au/common/story_page/0,5744,12364202^601,00.html

PETER Costello's closest adviser fears the US is heading for a devastating financial crash that could ravage Australia's economic growth.

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The International Monetary Fund, which is responsible for stability of the world economy, also warned yesterday of a sudden collapse.

IMF managing director Rodrigo de Rato said urgent combined international action was required to head off the dangers.

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Reserve Bank governor Ian Macfarlane said last week that he did not think the US current account deficit was a serious threat.

"I suspect the rest of the world will continue to finance the US current account deficit," he said. But if it did not, all that would happen would be a fall in the US dollar, which would not have serious consequences.