Market Expert Warns: ‘The Mother of All Bubbles’ in the US is Hoarding Global Wealth
By Jake Beardslee ·
December 8, 2024
In a recent Financial Times column, Ruchir Sharma, chair of Rockefeller International, warns of an unprecedented financial phenomenon in the United States. The market expert argues that the U.S. financial markets have reached an extreme level of dominance, creating what he calls "the mother of all bubbles." Burak The Weekender / Pexels
Sharma highlights several striking metrics demonstrating this imbalance. U.S. companies now constitute 70% of the leading global stock index, a dramatic increase from 30% in the 1980s, despite the U.S. economy representing only 27% of global GDP. Anna Nekrashevich / Pexels
Even when adjusting for the AI-driven tech boom, alternative stock indices reveal that the U.S. has outperformed other global markets by more than 4-to-1 since 2009. Matheus Bertelli / Pexels
The financial influx is not limited to stocks. In 2024, a staggering $1 trillion in foreign capital has entered U.S. debt markets, nearly double the amount attracted by the eurozone. Moreover, the U.S. controls over 70% of the global private equity and credit markets. Pixabay / Pexels
"Awe of 'American exceptionalism' in markets has now gone too far," Sharma warns. He critically notes that unlike previous eras where a rising U.S. market would bolster other markets, the current trend is different. "Today, a booming US market is sucking money out of the others," he writes. George Morina / Pexels
Other financial experts echo similar concerns. Mohamed El-Erian told Bloomberg TV that a "huge sucking sound" of foreign capital is flooding into the U.S., while Mark Spitznagel has repeatedly warned about what he calls the "greatest credit bubble in human history." iam hogir / Pexels
Despite these warnings, Wall Street remains optimistic. Prominent financial institutions like Bank of America and CFRA project significant stock market growth in 2025, with targets ranging from 6,585 to 6,666 for the S&P 500. Vlada Karpovich / Pexels
