Liquidity

Booming world liquidity is evident everywhere from the cash available for LBOs, through credit spreads and the price of raw materials. The absence from goods prices seems to relate to the equal abundance of labourm drawn into the global market through the changes in economic policy in countries from China and India, though Russia and the rest of CEE. Samuel Brittan - Money is making a comeback:

"Monetary analysis has recently made a comeback because of many signs that, in their efforts to avert recession early this century, central banks permitted an excessive expansion. One of the best explanations is given by Andrew Smithers, the City of London economist, in his report World Liquidity. He notes that the ratio of US broad money to GDP is higher than at any time, with the exception of the 1930s slump and the second world war. Eurozone money supply growth is well above its “reference range” and UK annual broad money growth is at its fastest since 1990. The Organisation for Economic Co-operation and Development has just published estimates of “global liquidity” based on both money and credit measures that show it is “abundant and continuing to grow”."