Even in stagflation, corps will do well - they are sitting on mountains of debt - those that globalized will benefit from incredible triage in labor rates around the world.
Habeeb in india is now nearly 20% cheaper to employ...
Stagflation makes US employees even MORE expensive - corps cant (or wont) afford; so more work will be shipped overseas, more ppl in america will fall behind.
US becomes more of an empty shell, 2 societies - one at the top making all the important decisions where labor will be employed and factories will be built and the other barely holding on
Nearly every corporation is doing same thing - taking on debt, buying back stonk- here is $UNH
$LOW
$AAPL
$GE is an interesting study - they are paying DOWN debt AND retiring shares....this might be set to explode higher next earnings....
$WMT is doing it
$TGT is doing it
But heres the problem - Trump had the best intentions when he cut corporate taxes; He then imposed HI import tarrifs on china - the idea - coerce corporations to invest domestically.
Digested and simplified - there are 2 critical components of reserve currency:
1) most trade is done in that reserve currency 2) most money is stored in that reserve currency
Right now, its the dollar.
And the store is US treasuries.
Any country thats wanted a seat at the international trade table must store foreign exchange reserves in dollars. But they want some return for their investment so they buy US treasuries.
If you look at trading economics, look at FX reserves for any given country.
Because most trade is done in dollars its easier to just store dollars in US treasuries. You sell treasuries for dollars when you need them.tradingeconomics.com/country-list/f…