The Dynamics of Global Liquidity and Cycles

Since different countries are typically in different stages of the cycle and since they take wealth and global political power from each other, some countries are rising while others are declining, so the whole is less volatile than any one country.

separation between the real and financial economies results in protracted capital misallocation, as flows of funds and created credit are focused into purchasing existing assets in the pursuit of stable savings returns from known predictable cashflows and anticipated capital gains in asset values.