Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

AI Summary. Selling U.S. stocks does not escape dollar risk if proceeds sit in dollar-denominated bank deposits, money market funds, or bonds, and shifting abroad introduces other risks, including currencies also subject to debasement. The author argues the U.S. advantages that drew heavy institutional allocations — free markets, rule of law, innovation, strong capital markets — largely remain intact.

Howard Marks Oaktree Capital
Date Posted:

Howard Marks warns that, while the fiscal outlook will likely drive dollar depreciation, moving out of US assets introduces other risks. He cautions American investors against abandoning domestic investments at scale.

Does selling U.S. stocks let investors escape dollar risk?

Core argument: Selling U.S. stocks for banks, money market funds, or bonds denominated in dollars does not escape the risk under discussion, according to the author.

If you sell your U.S. stocks, where will you put your money? A bank? A money market fund? Bonds? If they’re denominated in dollars, you haven’t escaped the risk under discussion. Moving into non-dollar or non-U.S. assets introduces other risks. Many companies elsewhere in the developed world have poorer growth prospects than leading U.S. companies and less scale (and thus fewer economies of scale). Most institutional investors have been heavily allocated to the U.S. to date, with great success, and the reasons for that – the free-market system, pro-business climate, economic vitality, spirit of innovation and adaptability, technological and managerial expertise, rule of law, moderate regulation, excellent higher education, strong capital markets – largely remain intact. No other country possesses these things to the same extent. Taking money out of the U.S. entails risks that could easily render it unsuccessful, especially if it’s done to avoid a problem whose reckoning may be so far off.

Takeaways by Macro Roundup® AI

  1. Selling U.S. stocks for banks, money market funds, or bonds denominated in dollars does not escape the risk under discussion, according to the author.
  2. Many developed-market companies outside the U.S. have poorer growth prospects and less scale than leading U.S. firms and often operate in more heavily regulated, less business-friendly jurisdictions, while emerging-market growth potential is more uncertain to realize.
  3. The reasons institutional investors have allocated heavily to the U.S. — free markets, pro-business climate, innovation, rule of law, moderate regulation, higher education, and strong capital markets — largely remain intact, in the author’s view.

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  • World’s Unusually High Dollar Exposure Risks Fueling Selloff — Pension funds and insurers in Canada, Denmark, Australia, Taiwan, Japan and Finland hedged just 41% of their foreign-currency exposure, the lowest share since at least 2015. With some of the largest holders of US assets carrying little protection against a weaker dollar, the currency is at risk of steeper declines if sentiment turns.
  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.
  • The Global Balance Sheet 2026: Imbalance And Divergence — Only 20% of global household wealth growth came from net new investment in real assets such as machinery, housing, infrastructure and intellectual property, down from a 30% average over the prior quarter century. Nearly 60% came from asset prices rising faster than inflation and negative net worth in other sectors.
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