MBMG IA Flash by MBMG Investment Advisory in Flash Posted on 01/11/2021 Liquidity Driven by Debt Ceiling Woes Post 2008, the key driver of asset prices since the Global Financial Crisis (GFC) during 2008-9 has been central bank credit creation. We believe that the boost in liquidity given by the US Fed by shuffling US government funds in early October in the run up to concerns about the debt ceiling being reached, increased liquidity by around $300 billion (in just a week) and this has very likely been what has, in turn, spearheaded the boost seen in stock prices. This boost is likely to be temporary or until the debt ceiling issues are resolved or not, in December.
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Why Stocks Went Up in October
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MBMG IA Flash by MBMG Investment Advisory in Flash Posted on 01/11/2021 Liquidity Driven by Debt Ceiling Woes Post 2008, the key driver of asset prices since the Global Financial Crisis (GFC) during 2008-9 has been central bank credit creation. We believe that the boost in liquidity given by the US Fed by shuffling US government funds in early October in the run up to concerns about the debt ceiling being reached, increased liquidity by around $300 billion (in just a week) and this has very likely been what has, in turn, spearheaded the boost seen in stock prices. This boost is likely to be temporary or until the debt ceiling issues are resolved or not, in December.