Draining Global Liquidity

An over abundance of money is in its self inflationary. The Feds Globally can't just come out and say they are pulling it back in (the markets would crash)...they are using the current CPI as cover. BOJ starts next month raising their interest rates in addition to draining some $180 billion year to date.

But the world is still awash with cheap money. Japan's overnight loan rate isn't expected to go above a half a percent this year and traders can still borrow in Swiss Francs below 2% through December, to fund global purchases of stocks and commodities.

Barkly always expects the unexpected it is in his nature. Long term capital management didn't expext Russia to default on their debt ...that was less than 9 years ago.


Generally speaking no one is looking for the unexpected and their portfolio's are leveraged as such....The Feds are pulling in the free money..the surprise could be how fast they elect to do it...

Bonds down seven days in a row!