Give us a dollar, oh! you know why.

Brad Setser at RGE Monitor has a very worrying picture:

It shows that long term lending to the US has dried up since August.

The consequences seem to me to be quite stark. Either

• the US starts to save much more, or
• the US offers much higher interest rates to foreign lenders

The first case means US, then world recession; the second case means financial market panic and recession. Anyone see any cheer in this?