Monetary Matters with Jack Farley Sell America Trade 2.0 | Andy Constan on Foreign Outperformance, Huge Financing Need, and Bull Case For Short-Term Rates
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Jan 22, 2026 
Andy Constan, founder of Damped Spring Advisors and macro investment researcher, explains his pivot away from U.S. assets towards opportunities in Japan and Europe. He discusses how huge AI capital expenditures will impact U.S. equity prices negatively. Constan argues that fading U.S. exceptionalism makes foreign markets attractive for investors. Additionally, he predicts potential Federal Reserve rate cuts due to disappointing economic growth and inflation. Gold remains a highlight for him as a hedge against borrowing and market volatility.
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Free Cash Flow To External Financing Shift
- Tech capex has shifted from being funded by free cash flow to requiring external issuance.
- If buybacks stop and firms spend instead, equities could fall even as the real economy is stimulated.
AI Could Grow Or Redistribute GDP
- AI's eventual payoff timing and source of returns are uncertain and determine whether it grows GDP or merely reallocates existing output.
- If AI mainly steals economic share, winners and losers will suppress aggregate growth.
Japan And Europe Become Investable Again
- Japan's yield curve steepening and low equity valuations now create a viable 60/40 diversification alternative.
- This makes Japanese and European assets more attractive than they were when yields were near zero.