That's what happens when there's no social system for pensions. In the US everyone and his dog has to "invest" in the stock market for their older days. In Europe this is happening more and more too, but there's also still a reasonable pension system in most countries that serves this purpose for individuals.
There are simply far more investers putting money in already inflated assets in the US than in Europe.
Take Tesla vs Volkswagen (or Porsche if you want). VW sells magnitudes more cars worldwide than TSL, even just the electric ones. Their ROI is much higher. And both their innovation is just as flakey at times (compared to e.g. Volvo who remain strong leader in all automotive innovation).
Anyone who looks at the solid figures, sees that VW is simply the stronger and more boring company. Yet people bet on the future, in which TSL promises to overtake VW. And then inflates the already inflated bubble some more, praying for that promise to be delivered on.
Praying, however, is not a good way to innovate an economy.
Over 70% is invested in equities, the rest mostly in fixed income (bonds). Not a whole lot different than an average 401k invested in a target date fund.
But the real zinger: over 33% of the total is invested in US equities alone, with a whopping 47% of all investments being in the US. 11.2% of total investments are in the US technology sector vs a mere 1.6% in European (including non-EU countries like Russia) technology. Truly humbling.
Norway doesn't seem to share your opinion on US equities.
All investment involves some gambling. Putting 1/3 into US stocks is not a bet on health and creativity of US conpanies. It's a bet on the assumption that the biggest casino on Earth will keep attracting the rich that don't have other places to go. Fairly safe bet I'd say.
Regardless, it only reinforces that the notion that US stock market doesn't reflect true worth of US companies because it's flooded with capital from pension funds. Not only US ones but from the whole world.
I, in my delusion have near zero influence on European economy, so if it's in fact falling behind, which it probably isn't, there must be other reason.
Not really. That happens when you have concetration of capital in few hands that can do with it whatever they want but there's really not much to do with it.
US stock market is analogue of Chinese real estate market. It's full of overpriced crumbling units and overt scams waiting to be exposed.
In Europe this capital is dispersed and more often serves the purpose of building infrastructure, increasing prosperity and well being of societies as a whole and developing large number of smaller businesses priced realistically. It's less flashy, but healthier.
The European economy is not healthy at all, and is facing an upcoming demographic crisis with a lot of issues with high unemployment and low wages causing brain drain.
I mean FFS the damn Euro literally almost became worthless because of the Greek debt crisis. Did people forget how close Europe came to abandoning its own currency?
Can you recommend some reading on the subject? I don't recall any ideas about abandoning Euro by anyone else but the Greeks, who probably just wanted to print more which would be devastating for them in anything but the short term.
