Monday, September 14, 2009
At the depths of the panic late last year, markets feared the onset of a global depression and deflation unlike anything seen in modern times. Fortunately that possibility now appears extremely remote, mainly because central bankers successfully matched the world's demand for liquidity and safety. There is plenty of damage left to be repaired, but as both these charts show, there is plenty of room on the upside for those willing to take the risk that the global economy can continue to right itself.
I'm mindful of the potential threat of all the liquidity that has been pumped into the system, but for now it appears to have done the job. The unwinding of the liquidity injections will be the big story in the months to come.
Posted by Scott Grannis at 9:44 AM