Markets face a toxic future as inflation fears grow
- Thread starter themickey
- Start date
Folks have been talking about strong demand and low US treasury bond yield. It has really nothing to do with the bets on US interest rate. It is more of a result of the strong demand from Asia. China has a huge trade surplus vs USA. It needs to park the USD. US treasury is about the only place China can park the USD.
Question - could they just not buy (more) U.S. real estate? I know if I were them I'd be buying U.S. real estate instead of U.S. treasuries!
I believe some are buying up US real estate properties. The housing boom has something to do with that too.
But that has somehow slowed due to covid and various government restrictions.
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INflation may help stocks + co....................................
Inflation itself never hurt stocks. It was the implication of unexpectedly high inflation and subsequent tightening, a term nobody knows anymore what it means for over 14 years, that caused rebalancing and a move out of equities due to higher borrowing costs among many other factors.
Inflation, when rising sharply like it is now to a 28 year high is bad for most but not all stocks, depending on materials they use, shipping costs, & labor. Many once profitable companies lose money during inflationary periods.
The market is massively distorted from the Fed/central banks printing to infinity.
The market is massively distorted from the Fed/central banks printing to infinity.
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In the 80s, Japan was very much the leader technologically, albeit for a brief period.
And comparing to Europe, even now it depends what you focus on. Transport is very much behind in the US, from air fares to slow trains to the road infra in decline. I'm not sure about the wider state of US gov't digital services but my limited experience shows it's two decades behind, basic form submission is laden with bugs that will likely never be fixed. There's neither any digital signature system in place on the government level but you can correct me if I'm wrong.
I'm not exactly certain why you focus exactly on the last 90 years, seems to be picked very carefully.
For sure you are right. And innovation can never be black or white. I guess I was thinking of basic research and innovation in technology rather than improvements and domestic governance. Agree with everything you said. And even basic research is not just strictly delineated among country borders. After all the best covid vaccine comes straight out of Germany. And there are certain research areas such as robotics where the US definitely lacks behind. But looking at the big picture I think most innovation is driven out of the US. Certainly not just by "natives" but to a huge degree by temporary residents or immigrants that perform research in the US.