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  • founder021

Liquidity is tight

The tightening the #fed is conducting on the US economy, and on the rest of the world, since the USD is the global reserve currency is remarkable. The M2 index, that measures the amount of money in circulation, has decreased 1.7% YoY. When liquidty dries up, markets may stop functioning smoothly. It’s important to notice that M2 growth has not been negative over the last 63 years, and if we go back long enough, we’ll see only in periods such as the Great Depression, was M2 negative. If and when inflation goes back to a controlable handle, the Fed may need to act and reverse its current actions to increase liquidity and avoid market disruption.


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