The US current account deficit, which is more than 6% of GDP, could lead to a significant collapse of the dollar, potentially by 30% or more. Despite global capital market deepening, the dollar's decline may not be prevented. The flexibility and integration of goods and factor markets are crucial for adjusting to large current account shifts. The current situation resembles the early 1970s when the Bretton Woods system collapsed. Faster growth abroad in nontradable goods can help close the US current account imbalance, but faster productivity growth in foreign tradable goods may worsen the issue.