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

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Global Liquidity is up an impressive near-40% since 2019 and by more than a whopping 125% since the 2008 GFC. To add context, the IMF estimates that World GDP across the major economies is barely 50% higher in nominal terms and a lesser 30% up in real terms.

So it’s little surprise that this excess liquidity has flooded into financial assets. Since

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