Money Supply ≠ Liquidity

When you think liquidity, think credit, not money. It's still bull market fuel because it keeps growing. But in the end, does it even matter?

Liquidity has always set the pace for economies and financial markets. Imagine a simple closed-loop island economy with a coin-based currency for a moment. If you double the number of coins and everything else remains equal, then you would probably expect consumer prices, wages, corporate profits and asset prices to double as well. I have discussed this…