Global Liquidity: The Real Issue
Every day I read more and more fanciful reasonings behind why the market is either going to go up or down, interest rates here and abroad will do the same, bonds will do this, vs. equities doing that, and so on. It is as though everyone has a favorite theory about how the Big Machine works, and, in the face of any crisis (no matter what kind, I think), they bring out the pat answers.
I have my own pat answer, if that’s the term for it, and I am no expert in assessing it. Even so, I have fairly well convinced myself that it is the most important concept on the current economic landscape: global liquidity.
If global liquidity is greatly reduced over the next few months or years, this will result in market damage on a global level. At the moment, it seems quite likely.