Weaponization of the dollar-based global financial system by the US would put richly valued stocks at rising risk from foreign capital outflows.
Exorbitant privilege or US exceptionalism – whatever you want to call it, US asset markets have been a recipient of enormous capital inflows from abroad. In only five years, inflows to US stocks have more than doubled, to $16 trillion, or almost $18 trillion if you include investment fund shares. That’s twice as much as the overseas equities the US has accumulated over the same period.
