By
Troy
February 23, 2021
Foreign investment
The past 12 months saw record inflows into U.S. equities from foreign investors. It’s also interesting to note that foreign investment was consistently low until the mid-1990s when globalization really picked up steam.
Looking at nominal numbers doesn’t really make sense since fiat currencies are constantly being inflated. To make this indicator more range-bound, we can look at foreign investment in terms of inflation-adjusted dollars:
The chart above demonstrates that foreigners have rushed into U.S. stocks at the fastest pace ever (in real dollars), exceeding prior peaks in early-2001 and 2007.
I would consider this to be a long term warning