Recession Risk: Do Slowing Global Liquidity Flows Signal the Next Downturn?

Real Vision Essential ·
Featuring Michael Howell and Ash Bennington

Published on: March 28th, 2022 • Duration: 53 minutes

Michael Howell has spent a large part of his career studying the critical role liquidity plays in global financial markets, from cross-border capital flows to private money creation, now a vital dynamic amid the Russia-Ukraine conflict. Howell, managing director at Crossborder Capital, joins Real Vision’s Ash Bennington for a global liquidity journey, explaining along the way how monetary tightening and withering resources in financial markets spells “global recession.” In providing a framework for understanding liquidity cycles, Howell also addresses whether it’s time for investors to rotate out of equities. Right now, it’s a simple question of risk appetite. Howell and Bennington discuss, among other topics, the correlation between oil prices and liquidity, the People’s Bank of China and its accommodative policies, the Federal Reserve and its fight against inflation, and great powers and emerging currency wars. The U.S. dollar will remain the global reserve currency for the foreseeable future. But Saudi Arabia’s oil-for-yuan offer to China is clearly unwelcome in the corridors of Washington. And the rising power of the yuan is impossible to ignore. Recorded on March 18, 2022.