On our calculations, as much as three- quarters of primary transactions now consist of debt roll-overs rather than new capital raising. These refinancings require liquidity in the form of balance sheet capacity within the financial sector. In addition, liquidity itself needs good-quality debts, like US Treasury bonds, to back it. According to the W

Evidence, as well, are the big jumps in debt (US$14 trillion and US$18 trillion) and particularly liquidity (US$5 trillion and US$35 trillion) following the 2008 GFC and the 2020 COVID emergency.

the near-US$185 trillion pool of Global Liquidity, the aggregated amount of international cash savings and credits. This is two-thirds bigger than World GDP, and because it includes elements of shadow banking and repo market activities, it exceeds traditional money supply metrics by some US$70 trillion. Global Liquidity is US$12 trillion higher so

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