This paper presents a model that rationalizes three key facts in global macroeconomics: the sustained rise in the US current account deficit, the decline in long-run real interest rates, and the increase in the share of US assets in global portfolios. The model highlights the interaction between observed forces of potential growth differentials and heterogeneity in the ability to generate financial assets from real investments. The authors show that these forces can generate the observed patterns in capital flows, interest rates, and portfolios. The model also explains exchange rate and FDI excess returns, which are consistent with recent trends. Unlike conventional wisdom, the model suggests that a large change in these forces is not necessary for a catastrophic event. The framework is flexible enough to analyze a range of scenarios in a global equilibrium environment.This paper presents a model that rationalizes three key facts in global macroeconomics: the sustained rise in the US current account deficit, the decline in long-run real interest rates, and the increase in the share of US assets in global portfolios. The model highlights the interaction between observed forces of potential growth differentials and heterogeneity in the ability to generate financial assets from real investments. The authors show that these forces can generate the observed patterns in capital flows, interest rates, and portfolios. The model also explains exchange rate and FDI excess returns, which are consistent with recent trends. Unlike conventional wisdom, the model suggests that a large change in these forces is not necessary for a catastrophic event. The framework is flexible enough to analyze a range of scenarios in a global equilibrium environment.