The ownership breakdown of the U.S. equity market is provided below. The reader will note that while households, active mutual funds, pensions, government retirement funds, etc. have declined in market share over time foreign investment continues to grow. Aside from households at 38% no other investors type owns a larger share of the equity market than foreign investors at 17%.
The second part of the tweet has to do with Brent Johnson's dollar milkshake theory. The dollar milkshake theory, in essence, calls for a rising dollar over time. The reason for this has to do with the large amount of dollar denominated debt that exists in the world today. For example, if India loans money to Sri Lanka to build a port the contract will be stipulated in terms of dollars, not rupees, and therefore must be repaid in dollars. This creates a constant demand for the dollar and, as a result, the dollar will continue to catch a bid especially during times, like now, where globally dollar liquidity has dried up. Keep in mind that something like 60% of global trade is still settled in dollars.
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