A central tenet of my world view is that the net flow that covers any country's current account deficit is embedded in the global data on gross flows, and one should try to ferret out the hidden source of the net flow

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For example, before the global financial crisis, the flows from the oil exporters didn't appear directly in the US BoP data -- but the oil exporters were providing a lot of dollar funding to European banks who were buying a lot of US MBS

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The apparent rise in gross flows that didn't map to a current account surplus/ deficit in fact has embedded in it a net flow from the oil exporters to Europe and from Europe to the US ...

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The hedged inflow into the US from Japanese lifers is similar -- there is a net inflow into Japan (to fund the lifers), perhaps from China, and matching net outflow from Japan to the US ...

Taiwan is similar but different (the hedges come from the CBC)

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