To: Box-By-The-Riviera™ who wrote (342699 ) 9/5/2007 2:07:18 AM From: stan_hughes Respond to A few days old now, but still quite relevant -- IMO there are several interesting points-of-view expressed in here actually --World Liquidity the US shows a clear pattern of sequential growth rates becoming weaker (significantly weaker at that) as the pace of growth stepped down in its rate steadily from 3 years to 2 years, and from that to one year, then to six months and then to three months - with the three-month pace at just 3.6%. That is too low to fuel what has been strong nominal GDP growth in Q2 in the US (these figures are all through July 2007). But </g>money generally acts with a lag on the real sector so it’s hard to blame the market problems on a slowing in money growth that occurs only in the US.On balance, there is no sense of there being deficient liquidity among this grouping of major global money centers. The liquidity problems markets now face are all of their own making, not due to the actions of the central banks. It’s a micro- not a macro-liquidity problem. Don’t blame the central banks.Central banks rightly worry about the other sort of liquidity problem right now - have they made too much? The levels of the growth rates in the table below sure argue for the answer ‘yes’ to that question everywhere but in Japan – there, of course, there are special things in play. Unfortunately this is the wrong time for central banks to be taking up this fight.Only the Fed seems to have taken action to date to squeeze some of the excess liquidity from the market. And with that, markets now are begging for the Fed to re-inject what it has taken out (or, more correctly, slowed down its injecting) .haver.com
