Where is the money?

First whether there is money?. Central banks have outdone each other in terms of flushing the banking systems with liquidity from eonia to sonia to libor to desi mibor all of them easily closer to their historic lows. So, plenty of short term money but what about long term money? its definitely not cheap as the yield curves across the globe are steepest again at all time kind of levels. but that is not the problem, problem is demand? there has been 0% credit creation in India, one of the fastest growing economies in the world, in this current year so far. just wonder what would be happening in the Recessioning nations. whatever loans and credit offtake is there, it is for substituion or repayment or some such thing. So no fresh credit demand from corporates i.e. no capex. (ofcourse credit creation is getting substituted by huge government borrowing but for expenditure not capex) So from the money supply side, world economy resembles a patient who has very good life support (money market) but no outlook on when he could have his steak and fine meals(capital markets).

So bottom line there is money, but very hot, can disappear easily.

Now where does the money go?