There is plenty of liquidity in the system. The growth of the money supply is soaring. This is a very important trend (click on above chart to enlarge).
The growth in MZM has been rising since late 2006. Its trend will help cushioning the economic slowdown. It is anticipating a pick up in business activity in late 2007 or 2008.
The strength in commodities, the weakness in the dollar, stronger stock prices, and the pick up in inflation could very well be the markets reaction to too much liquidity.
Are the markets saying the Fed will have to eventually tighten to reduce the monetary stimulus?
More on https://www.peterdag.com/
George Dagnino, PhDEditor, The Peter Dag Portfolio on http://www.peterdag.com/
Since 1977
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