Why The Global Asset Boom Is In China's Hands

Authored by Simon White, Bloomberg macro strategist,

Surging money growth and a weak economy are generating trillions of dollars of excess liquidity in China which is leaking abroad, inflating global asset prices. A strong Chinese recovery, therefore, could eventually be a problem for markets.

Stocks are wobbling today, but that does not detract from the bigger picture that they have been sailing to all-time highs around the world. The S&P, the Nasdaq, the FTSE, the Nikkei, the Kospi, the Bovespa and more are trading very near record peaks along with, until very recently, gold. No single cause – a resilient US economy, artificial intelligence, a trade truce – can adequately explain why this is. The missing piece is China.