The Liquidity Pyramid of the New Monetarism

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Global demand for the dollar is driven by the explosion in dollar-denominated assets…almost completely out of the control of central banks. These “assets” are the preferred retirement vehicles for millions of Western Baby Boomers…and the quickest way for money shufflers in London, Washington, Sydney and elsewhere to get rich of the flow of cash.

Only a radical increase in official interest rates or a radical decline in the confidence of the dollar will change the incentives which encourage the creation of new assets denominated in dollars. Will either event happen in 2007?

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Comments

  1. [quote]Only a radical increase in official interest rates or a radical decline in the confidence of the dollar will change the incentives which encourage the creation of new assets denominated in dollars. Will either event happen in 2007? [/quote]

    Yes, as soom as the finantial international capital feel secure that after the TEOTWAWKI they will ressurge as the winners.

    Soon, very soon, in unspected way!!!

    Alexandre Weber
    January 14, 2007
    Reply
  2. This looks a lot like John Exter’s inverted pyramid.

    Reply
  3. Proper credit to John Exter should really be given. The only “new” word in there is “global.”

    Thomas O'Toole
    March 18, 2008
    Reply

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