Global Liquidity Watch: Weekly Update

Global liquidity is rising steadily and has reached a new all-time high of US$177.2tr, according to measures derived from the weekly balance sheets of the major Central Banks and collateral values. We had expected the current liquidity cycle to peak around Q4 this year.

Global liquidity, which I measure as global broad money supply of major currencies, translated into a dollar denomination, continues to be rangebound as well. The weaker dollar index has been supportive for global liquidity growth in recent months, but China’s flat money supply from March 2024 to the present has been a drag on global liquidity grow

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A central theme in Howell’s analysis is the assertion that liquidity flows have become crucial in understanding the modern financial landscape. In recent years, particularly since the global financial crisis, the nature of capital investment has evolved. Interest rates, which historically served as a critical indicator of capital allocation, have b... See more

total global liquidity has historically risen and

fallen in these predictable tides of around 5 years this cycle is determined by the average five to six year debt maturity profile that you've spoken about the lows of each cycle nearly always coincide as you've said with some kind of financial crisis and central banks always step in to provide more

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Therefore, unless the US Fed restarts QE, the omens for Global Liquidity are not great. Does this mean that investors face a threatening financial crisis? We are not this downbeat simply because the heightened demands for debt refinancing that so offer trigger crises are unlikely to bite until 2026. However, a future threat remains, even if we are ... See more