Carl

That reversal can jolt currencies and markets.

Yes, we have a listener from Madrid, Lucia, who wants to know, I've never understood why money rushes into the US during global crises.

It seems strange that the dollar strengthens in bad times.

Well, it may seem strange, but it's all because the US is seen as a financial safe haven.

Its markets are deep, liquid, and trusted.

In uncertain moments, investors prioritize safety over return.

That drives demand for US assets and the dollar.

Fear often points money in the same direction.

Hey Lana, today's question comes from David in Boston who asks, What are capital flows?

What exactly is moving when people say money is flowing in or out?

So capital flows describe money moving between countries, markets or assets.

It happens when investors chase returns, safety or opportunity.

That money can flow into stocks, bonds, real estate or currencies.

Where it goes reflects confidence and where it leaves signals concern.

Markets rise and fall as that capital shifts.

We've got a big one from Ethan in Austin who wants to know, are markets actually rational?

My sense is that they're logical and emotional at the same time.

Your sense is absolutely correct, Ethan.

Markets are rational over time, but emotional in the moment.

Fear and greed dominate short-term pricing.