Nice talk, but I fail to understand how does the ex US markets get their currency stronger if interest rates drop? Because the assumption that international markets would get their currencies stronger when US drops rates is only true if the international markets also do not cut or print. In the last 15 years the correlation between US and international rates has just been increasing… I don’t think it’s simply a vacuum based on how you describe it. And if everyone cuts rates and prints, then everyone does well because that anyway leads to asset price inflation.
To add a further comment - for the Chinese EV market to take off with a slowing US market doesn’t make sense intuitively because at the end of the day, the US will end up being the biggest EV market in the World. At the end, all growth comes from increase in debt. As long as there is increase in debt, there is growth, which provides a tailwind to all growth theses.
Nice talk, but I fail to understand how does the ex US markets get their currency stronger if interest rates drop?
Because the assumption that international markets would get their currencies stronger when US drops rates is only true if the international markets also do not cut or print. In the last 15 years the correlation between US and international rates has just been increasing…
I don’t think it’s simply a vacuum based on how you describe it.
And if everyone cuts rates and prints, then everyone does well because that anyway leads to asset price inflation.
To add a further comment - for the Chinese EV market to take off with a slowing US market doesn’t make sense intuitively because at the end of the day, the US will end up being the biggest EV market in the World.
At the end, all growth comes from increase in debt. As long as there is increase in debt, there is growth, which provides a tailwind to all growth theses.