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I will post a Liquidity Cliff Countdown Update this weekend, but meanwhile, I reviewed the charts from the Fed’s H41 weekly balance sheet update. Most had nothing notable that we haven’t already covered in the macro liquidity updates. However, there was one exception.
The chart of combined foreign central bank holdings and RRPs with the Fed continues to plunge in opposition to the US market rallies. The charts show that foreigners continue run from the US.
The weakness in the US dollar is no accident and no mystery. This signal it is sending has a long and variable lead time. But it should not be ignored. Here’s the chart, current through Wednesday. This is the real thing in real time.
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