The Dollar, Foreign Investors, and a $20T Problem… Perhaps the scariest quote and chart I’ve read all week. If you’re a bull, look away. If you’re an unbiased investor ready for cold hard facts, here you go. The quote and chart are from Deutsche Bank w/some additional commentary by Zerohedge. But the facts reflect the reality. Thanks to this bank and Zerohedge for explaining it in language clear to those not savvy in “market talk.” According to Deutsche Bank: “We estimate that roughly 90% of the $20+ trillion value of US equities owned by foreigners is attributable to price appreciation rather than underlying buying. Put simply, for every $1 of US equities that has been bought, there are roughly $10 equities now owned.” Napkin math: roughly $2 trillion of actual buying under $18 trillion of mark-to-market gains (likely from a handful of megacaps). The flow that built the pile was small; the pile that can be sold is not. Read that last sentence again! Translation via ZeroHedge: Our take: the market still treats the dollar as the default hedge for a tech crash, and the unhedged, concentrated positioning prices exactly that. If the next leg of the AI unwind is US-made—which it will be—the dollar is more likely part of the problem than the solution. Nothing says “safe haven” like an asset whose foreign owners are 90% paper gains. H/T: ZeroHedge, Deutsche Bank Research Source: Deutsche Bank Research