Current account deficit: We are living beyond our means

The essence of the 'this-time-is-different' syndrome is simple. It is rooted in the belief that financial crises are things that happen to other people in other countries at other times; crises do not happen to us, here and now. We are doing things better; we are smarter; we have learned from our past mistakes. The old rules of valuation no longer apply. Unfortunately, a highly leveraged economy can unwittingly be sitting on the edge of a financial cliff for many years before chance and circumstance provoke a crisis of confidences pushing it off the edge. 

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