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>The biggest driver for this increase is not increased buying of US equities by foreigners. Instead it has been market outperformance of the US stock market relative to foreign stock markets. This drives up US liabilities to foreigners who hold US stocks.

This assumes that average holding period of foreign equity holders is much longer than the market average. There is no evidence to suggest this is true, implying 50% of the increase in foreign equity is due to inflows.

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