Global Liquidity (in USD), a rough measure
This black barchart is the M2 of the largest central banks of the world (USA, China, Europe, Japan.), converted into USD (in Trillions), which is the world reserve currency.
So this is a rough expression for global liquidity, which can go and buy assets like stocks or bonds.
Any strong decrease in this Liquidity should sooner or later lead to a run for US Dollars to service the huge amount of "Eurodollar" debt aka global USD-denominated debt. Leading to asset markets finding themselves up in the air like Wiley Coyote.
In comparison it shows $SPY in orange. You can see how declines in liquidity can lead to stagnations in $SPY. In 2016 though the market seems to have front-ran the acceleration of supply of liquidity...
This chart is just an analysis on liquidity as an indicator, not a prediction on what to come next from here on...
So this is a rough expression for global liquidity, which can go and buy assets like stocks or bonds.
Any strong decrease in this Liquidity should sooner or later lead to a run for US Dollars to service the huge amount of "Eurodollar" debt aka global USD-denominated debt. Leading to asset markets finding themselves up in the air like Wiley Coyote.
In comparison it shows $SPY in orange. You can see how declines in liquidity can lead to stagnations in $SPY. In 2016 though the market seems to have front-ran the acceleration of supply of liquidity...
This chart is just an analysis on liquidity as an indicator, not a prediction on what to come next from here on...