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Fears of global liquidity crunch haunt Davos elites
Rising Fed interest rates means "liquidity could drop dramatically, and that scares everyone", warns IMF deputy
The International Monetary Fund is increasingly alarmed by signs that market liquidity is drying up and may trigger an even more violent global sell-off if investors rush for the exits at the same time.
Zhu Min, the IMF's deputy director, said the stock market rout of the last three weeks is just a foretaste of what may happen as the US Federal Reserve continues to raise interest rates this year, pushing up borrowing costs across the planet.
The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned.
"The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up," said William White, the Swiss-based chairman of the OECD's review committee and former chief economist of the Bank for International Settlements (BIS).
"Emerging markets were part of the solution after the Lehman crisis. Now they are part of the problem, too."
William White, OECD
"Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief," he said.
"It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something," he told The Telegraph on the eve of the World Economic Forum in Davos.
originally posted by: onequestion
So anyone who's been here long enough has probably noticed that topics tend to trend. I don't know if this is because of the MSM or some other control mechanism leeching into the ATS community or if it's simply by chance or possibly we just catch onto things. Either way it happens, specific topics will be hot topics for a while before it changes.
During the 2008 crash for about 2 after survival, meltdown, apocalypse, crash, buy gold threads were super popular.
I've recently noticed a small uptick in the amount of global meltdown and financially related threads and topics. Maybe it has to do with the Baltic Dry Index, maybe it has to do with China, maybe it has to do with the stock market, maybe it has to do with something else. Either way doesn't matter.
So do you think that this trend is an indicator for the market or that our community tends to over react or are we on to something or are we controlled opposition?
What do you make of it?