This paper presents an equilibrium model of "global imbalances" and low interest rates, explaining three key facts in global macroeconomics: the persistent U.S. current account deficit, the declining long-run real interest rates, and the increasing share of U.S. assets in global portfolios. The model shows that these phenomena can be understood as equilibrium outcomes of two forces: differences in potential growth across regions and variations in the ability of regions to generate financial assets from real investments. The model also generates exchange rate and FDI excess returns consistent with recent trends. Unlike conventional wisdom, the model suggests that these imbalances do not necessarily lead to catastrophic events. The paper divides the world into three regions: the U.S. and similar economies (U), the Eurozone and Japan (E), and the rest (R). The model shows that a slowdown in E's growth and a collapse in R's asset markets lead to increased capital flows to the U.S., lower real interest rates, and a larger share of U.S. assets in global portfolios. The model also considers the role of foreign direct investment (FDI) and shows that FDI can help finance U.S. trade deficits. The paper concludes that the model provides a flexible framework for understanding global equilibrium and the factors behind recent global imbalances.This paper presents an equilibrium model of "global imbalances" and low interest rates, explaining three key facts in global macroeconomics: the persistent U.S. current account deficit, the declining long-run real interest rates, and the increasing share of U.S. assets in global portfolios. The model shows that these phenomena can be understood as equilibrium outcomes of two forces: differences in potential growth across regions and variations in the ability of regions to generate financial assets from real investments. The model also generates exchange rate and FDI excess returns consistent with recent trends. Unlike conventional wisdom, the model suggests that these imbalances do not necessarily lead to catastrophic events. The paper divides the world into three regions: the U.S. and similar economies (U), the Eurozone and Japan (E), and the rest (R). The model shows that a slowdown in E's growth and a collapse in R's asset markets lead to increased capital flows to the U.S., lower real interest rates, and a larger share of U.S. assets in global portfolios. The model also considers the role of foreign direct investment (FDI) and shows that FDI can help finance U.S. trade deficits. The paper concludes that the model provides a flexible framework for understanding global equilibrium and the factors behind recent global imbalances.