Capital flows to the US temporarily increases: The US has a large deficit in its public finances and current account. This must be financed (in part) by the inflow of foreign capital. If too little capital flows in, US interest rates will rise and/or the dollar will fall until there is sufficient capital inflow. This is an economic law. For a long time, however, this was not an issue, because the American economy was growing rapidly and interest rates in the US were much higher than in most other countries. This even led to so much money flowing into the US that, despite the “Twin Deficits”, the dollar rose in value. In recent quarters, however, the tide has turned