As elegantly put by the Bank of International Settlements in its recent annual report, the soft landing for the global economy suddenly seems more elusive.
The American retreat from the center of the international economy and the surge in policy uncertainty this year have jolted financial markets and resulted in a sustained depreciation of the American dollar.
Foreign investment in U.S. financial securities and direct investment in its corporations are outstripping U.S. holdings of foreign assets by $26 trillion as the end of last year.
This volatility is likely to continue as Washington’s de facto weak dollar policies prompt international investors to diversify away from the dollar and dollar-denominated assets.
Foreign investment in U.S. financial securities and direct investment in its corporations are outstripping U.S. holdings of foreign assets by $26 trillion as the end of last year.
It’s a stunning figure, one that has…
