In 1996 foreigners snapped up a record $232.2 billion in U.S. bonds, and in 1997, $184.2 billion. Although the pace of net Treasury purchases slowed to $40.4 billion in the first six months of 1998, it has been made up, in part, by foreigners' increased appetite for corporate bonds and equities. Since 1994 U.S. equities purchased by foreigners shot up by an astounding 3,379%, to $66.1 billion in 1997.
Thus foreign money has helped swell the U.S. bull market, and the bull market in turn has attracted foreign money.
Haim, this is what is scary. When they start pulling this money, if they do, and with the U S savings rates the way they are, will the money flow into the market be sufficient to hold it up?
Monty
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