
Nedbank Asks: Is A Dollar Liquidity Crunch Coming?
Via Nedbank's Neels Heyneke & Mehul Daya
Since 2014 when the Fed’s balance stopped expanding and the oil price collapsed (petrodollars), the world has been plagued with a dollar shortage problem. As a result, excess reserves at the Fed stopped growing. The shortage of dollars is a longer-term structural problem for the world.
Some background information first: In the 2008/9 GFC, the Fed engaged in extraordinary measures such as quantitative easing to provide the financial system with liq