On December 3rd, Financial Alliance reported (Editor Zhou Ziyi) that the overhyped usa market is brewing an unprecedented bubble — this viewpoint was recently put forward by Ruchir Sharma, chairman of Rockefeller International, a wealth management and financial consulting company.

Sharma stated that despite increasing global geopolitical and macroeconomic concerns, international investors seem to have reached a consensus on one thing: that is to increase their shareholding in usa assets.

He pointed out that 'global investors are confident in the strength of the usa financial market and its continued ability to outperform all other economies, and they are pouring more funds into this country, which is unprecedented in modern history.'

Rockefeller Capital Management was established in 2018 and is a leading independent private financial services company. It was originally formed in 1882 as the John D. Rockefeller family office and has now developed to provide strategic advice to ultra-high-net-worth and high-net-worth individuals and families, institutions, and businesses from 29 offices across the usa. Rockefeller International is a division of the company aimed at expanding its business footprint outside the usa.

According to Sharma, usa stocks now account for nearly 70% of global major indices, far exceeding the approximately 30% level of the 1980s. In addition to the optimistic profit outlook of large usa companies, there is also a high expectation that the elected president, Donald Trump, will boost the domestic economy, factors which have kept global investment focused on the usa.

Meanwhile, if measured by certain indicators, the current exchange rates of the dollar have also reached their highest level in 50 years.

However, Sharma warns investors that this mentality is 'inflating' an unprecedented bubble and distorting the fundamentals of other economies.

Unprecedented.

During the internet bubble period in 2000, the valuation of the american financial stock market exceeded current levels, but its premium relative to other parts of the world did not reach the exaggeration seen today.

Certainly, to some extent, the excellent performance of the american market is justified, as the economic growth rate of the usa has indeed outpaced that of other developed economies. However, compared to the markets of some developing countries, this premium is unreasonable, as developing countries often experience higher economic growth rates than developed nations.

Sharma wrote, "Investors are talking about technology or ai bubbles, or focusing on growth and momentum investment strategies, which obscure the root causes of all the bubbles in the american market. The usa has been excessively held, overvalued, and overhyped, reaching an unprecedented level."

Sharma also pointed out that these situations will eventually lead the american market into recession, but at the same time, it is also causing troubles for foreign economies.

"In the past, including the prosperous 1920s and the internet age, the rise of the american market would boost other markets. However, today, the booming american market is siphoning funds away from other countries... When funds leave smaller markets, the outflow of capital weakens the local currency, forces central banks to raise interest rates, slows economic growth, and makes the fundamentals of the nation look worse."

Currently, the attractiveness of the usa in the global bonds and private markets has also reached an unprecedented height.

As predictions about Trump's policies have stimulated foreign demand for us dollar-denominated american bonds, the dollar has accelerated its rise since October. Sharma stated that so far this year, overseas traders have invested 1 trillion dollars annually in us debt securities, nearly twice the capital flow from the eurozone.

Moreover, the usa has attracted over 70% of the private investment inflow, with the private investment market size reaching 13 trillion dollars.

Worse still, with Trump's return to the White House, it has further intensified a trend where investors believe that the tariffs and low tax plans proposed by Trump will further drive up the market. Sharma expressed concern, "As with all bubbles, it is difficult to know when this bubble will burst or what factors will trigger the market collapse."