The M-Wave: Where Now? Higher?

by Michael J. Howell2. September 2012 12:04

We have long been taken by the idea of an M-shaped financial/investment cycle. This simple prognosis from 50 years of monetary and credit history suggests this repeating pattern plays out over a ten -year period.

In short, we get two asset booms per banking crisis, with these up-legs separated by an 18-month/2-year sideways period, characterised by ranging markets, sluggish economic growth and low inflation.

Our original timeline placed this liquidity pause from Q1 2011 to Q3 or Q4 2012, with the endgame dependent on Central Banks agreeing to another round of QE (quantitative easing).


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