I feel a need to bookmark this moment — earlier this month, it felt about as bad to an American as it has in my lifetime.1
This feeling, data-driven or otherwise, was enough to actualize money managers moving away from U.S. assets. Something that has been so out of vogue for decades as we live at the end of history.2 It was enough to move gold to an all-time high. Something that has been laughed at by most of Wall Street as we live at the end of history.3
The “end of history” refers to a line of thinking that we’ve found the final state of equilibrium. It refers to the end of humanity’s ideological evolution. The point at which a particular political and economic system becomes universally accepted as the final. In this case the final equilibrium of the economy is underpinned by the risk free U.S. dollar, U.S. treasuries, and on the risk-on side, high growth U.S. stocks. It’s not been a U.S.-centric run, it has been completely uni-polar.4
But nothing lasts forever. I mean that literally. The Milky Way will collide with Andromeda and completely rework the cosmos. This shows that only constant evolution can give you a chance to outrun entropy.
I am working on a longer form piece in this general vein. Hopefully this is a bookmark to look back at and laugh at its foolishness.
But it happened. The U.S. dollar has weakened. The yield on U.S. treasuries has increased.
But it happened. U.S. stock sold off. Stocks in Europe caught a bid for the first time in decades.
This post would be incomplete with out a mention of China. The CCP is the first challenger to U.S. dominance. Without that challenger, the margin for error would be much greater.