The Carry Trade -- August 21, 2024

Locator: 48482INV.

For the past week, a most common phrase on CNBC has been "the carry trade."

This is"the carry trade," link here:

• borrowing money in a non-US currency,
• in a country whose central bank is lending money at zero interest, or even at negative, rates,
• to buy US dollars,
• with which to buy US equities. 

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My Favorite Chart

See this post.

I've not heard anyone talk about this, but pray tell, from where is all the money coming when MMFs and the US equity market are both at all-time highs. 

From where is all that money coming? 

That's a rhetorical question. 

The answer: the great / generational wealth transfer. Link here.

The baby boomers, 1946 - 1964.

Those baby boomers who live to be 75 years old -- they reached/reach that age ... the earliest ones, 2021 -- the last one 2039. In other words, this great / generational wealth transfer has literally just begun.

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A Musical Interlude

Headphones, and play it loud.

Link here.