Where Are My Foreign Assets When I Need Them?

How do you show the challenge of the eurozone periphery in one chart? Well, it is difficult but the representation below is a good pick in my view. A structurally negative net foreign asset position is a very tough hurdle to overcome when in a currency union, saddled with poor demographics and need net external demand to boost national income. Think of the periphery as Japan and Germany without(!) the strong net foreign asset position. 

These countries seem to have grown old before getting rich and without the ability to devalue in nominal terms, the outlook is not good. 



Picture is courtesey of Pantheon Macroeconomics and has also been posted on Twitter.