The end of American exceptionalism goes way beyond Trump

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The author is chairman of Rockefeller International. His latest book ‘What has been wrong with capitalism‘

Many people who hypide the election of Donald Trump as a huge enthusiasm for “American exceptionism” are now seen as a sign of recent collapse and dollar in US stocks that this era of US domination is under threat. They are suddenly leaning towards Trump. If this is not for Washington’s daily drama, they think US markets will still go away from other parts of the world.

The Bubble, however, predicted Long Trump’s second term in the American exception. After the year after year was built in the global market, it showed classic symptoms of climaxing after its election, while many confirmed that the new president’s policies would attract more capital to the United States. However, such irrational enthusiasm was forced to pop the first Sharp pin. If Trump’s first days were not in turmoil, then any other shock investors persuaded to revisit their record high allocation on US property.

Even after the decline of last month, the real value of the dollar remains in height in the early 1970s after the fixed exchange rate is rarely seen. Meanwhile, S&P 500 is less than 10 percent below its February peak and still transactions over 25 percent of the growing trendline in the last one and a half years.

This year, despite the intense assembly on European and Chinese stocks, US stock Are valued 50 percent of the premium above the international market – closer to the extensive leadership on the record. The main Global Market benchmark part of the United States remains more than 605 percent, though the Global GDP is below 5 percent.

In short, the overdoing of the global markets has just begun to balance, and maybe it can play for a long time.

From the titles, you think investors are questioning our domination based on our entire Trump’s tariffs and extreme uncertainty surrounding its principles. However, the hype surrounded by American exceptions was built in higher US economic growth, which was artificially juicy Public expenditure And an unprecedented enthusiasm for capital expenditure on artificial intelligence. The US economy has never been a government-dependent before, and 6 percent budget deficit was not sustainable. Meanwhile, recent financial reforms in Germany and the introduction of low -cost AI models in China, prove that it can compete with the United States around the world.

Still to move, up to Equity Has been managed by the rapid money crowd with the hedge fund. Many more have not yet been followed. Even consumer and small business surveys show the reduced confidence, American retailers buy dive. They paid more money to US stocks every day as the prices reached the top by the end of last month. Often, they use the most offensive vehicles such as leverage in the available ETFS.

From Australian Pension Fund to Japanese insurance companies, foreign investors also remove money in the United States. In recent years, more than 5 percent of the money invested in the global stock market funds went to the United States. Over the past decade, their American equity holdings have risen three times by three times by three times, foreigners now own 30 percent of the US stock market, which is a record high.

Giving their bullish view on the dollar, they have just heded their exposure, weakening the US currency as before. Over the decades, the country has launched a large international investment deficit, which means Americans own much less resources abroad than foreigners in the United States. In the beginning of this decade, this deficit was at the top of 50 percent of the US GDP, it is a layer that often indicates that currency decrease in the past. And today the deficit is even wider, 5 percent of GDP, and the other advanced economy is mostly surplus.

In the past, when the US market did well, stocks around the world were tend to do well and when the country worked badly it was bad. This tie has been broken in recent times, as the hype all around America sucks money and life Out of other markets. This link is broken, only the United States is now deviating and some other countries are stumbling it.

In the European stock markets in a decade they had just their best month for foreign flow. Japan is attracting the flow as well. The emerging markets are no longer reading with the US market. And the questions about the US economic and market domination will continue to fade as the American exceptionism is faded as the questions spread to the wide mass of investors worldwide. This may be difficult to believe but many forces in the game are bigger than Trump.