Submitted by Pater Tenebrarum of Acting Man blog,
Money TMS-2. Here it is, the ‘sidelines’ cash. All of this newly created money of course continues to exist and is held by someone. In that sense, it is therefore always ‘on the ‘sidelines’ – click to enlarge.
The ‘cash on the sidelines’ myth has more lives than a cat. No matter how often the logical fallacy underlying it is pointed out, Wall Street continues to propagate it. Nevertheless, money and credit are of course extremely important factors in the analysis of asset markets. The above provides what are hopefully a few useful pointers as to which data one should keep an eye on in this context.