-
Blame the next global financial crisis on the U.S. dollar
Since 2009, the key driver of financial markets has been liquidity. All asset prices have been affected by the central banks’ attempted reflation. According to one estimate, over 80% of equity prices are supported in some way by quantitative easing policies. Today, as much as $200-250 billion in new liquidity each quarter may be needed to simply maintain asset prices. But now the world is entering a period where monetary policy will diverge between central banks. This has implications for both markets and asset prices. The Federal Reserve is scaling back, terminating purchases of government bonds and mortgage ... (full story)