Global Liquidity takes an international perspective, considering liquidity created by multiple monetary authorities, including central banks outside the US like China's PBoC. It also accounts for private sector credit provision through various channels, such as banks, repo markets, and shadow banks. Importantly, it embraces the concept of the... See more

Unlike traditional measures like World M2 money supply, which primarily track retail deposits, Global Liquidity is a wholesale measure that focuses on the asset or credit side of the financial system. It captures the capacity of the entire world financial system to create credit and facilitate transactions. This is crucial because, as noted by... See more

In this debt-dominated system, policymakers face the necessity to continually expand liquidity to prevent crises that could arise from collateral shortages and rollover risks. This constant expansion of liquidity in the broader financial system, aimed at preventing instability, makes assets that can hedge against currency debasement, such as... See more