Reference News Network, August 4 report: The "Japan Economic News" published an article titled "Funds Continuously Flowing Out of the United States" on August 2. The author is Hirofumi Takeuchi. Excerpts follow:

Due to the tough policies of the Trump administration, there was a "moving away from the US" phenomenon in April this year, with the selling of US stocks and the dollar. Howard Marks, co-founder of Oaktree Capital Management and a renowned investor, pointed out that people's confidence in the United States has declined. The dominant financial position of the United States as a magnet for global funds is being shaken, and the phenomenon of funds moving away from the United States will become long-term.

Reporter: The United States is the largest global financial market, but the Trump administration has had a negative impact on it.

Marks: For over 100 years since the end of World War I, the United States has been in a position of advantage globally. A combination of factors such as a vibrant economy, technological innovation and entrepreneurial spirit, abundant natural resources, and a well-developed education system have made the United States a hub for global capital.

To summarize the situation in the United States after Trump's so-called "Liberation Day" (April 2, when he announced "reciprocal tariffs"), it is a loss of credibility. Trust in the United States, which has supported the country for 100 years, in the economy and rule of law has been shaken. The Trump administration gives an impression of unpredictability and instability, with many policies being overturned in court. This suggests that it is making forced interpretations of the law.

Question: Funds from around the world have promoted the economic growth of the United States. Is this trend likely to change?

Answer: No investor can create an investment strategy that does not include U.S. financial assets. Compared to other countries, the U.S. still has strong ability to attract funds, but it is no longer absolute.

This decline in cohesion will be long-term. Trump's presidency has three and a half years left. It is expected that the results of the midterm elections in November 2026 will bring changes, but there will be no fundamental changes in the next one and a half years.

Question: However, the U.S. stock market has once again set new highs. The AI investment boom remains strong.

Answer: It feels like the current market situation is similar to the past bubble period. This is a common situation in a bubble economy - investors are afraid of missing out, and they feel like they are losing out if they don't invest.

Most bubbles come from new things. Coal and cars do not produce bubbles. People call the "Magnificent Seven" including NVIDIA a top group of global enterprises. I remember (in the 1960s and 1970s) there was the same thing, people would talk about the "Nifty Fifty" (50 of the most popular stocks like Polaroid, Xerox, etc.). Although it hasn't reached the level of madness at that time, the current valuation of U.S. stocks is high.

Question: The ever-expanding U.S. government debt is also a disadvantage for the U.S. capital market. Is the U.S. fiscal sustainable?

Answer: In the past 100 years, we have had a golden credit card without limits, no bills, and no need to repay. Can the state continue to spend more than it earns without any cost? That would be too lucky. But in reality, it is unsustainable.

Question: Investment funds have driven the globalization of companies. The result is that the anger and frustration of voters who feel abandoned have changed American politics and gave rise to the Trump administration.

Answer: After World War II, technological advances and globalization drove global economic development, and humanity experienced the best era in history. If products can be produced at an attractive price and of high quality, they can sell worldwide. That is the meaning of globalization. If countries export their most skilled and cheapest products, the happiness of people around the world will be maximized. (Translated by Liu Jieqiu)

Original: https://www.toutiao.com/article/7534642405321048586/

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