Now, have we seen peak liquidity?

This shows you the amount of liquidity injected by the big four central banks this year

and their plans for the coming years.

And as you can see, if they hold by their announced plans,

2018 is going to be the year in which liquidity actually goes into reverse,

in which central bank balance sheets actually, on-net, begin to decline.

Now if that happens it's a good sign,

in that that means that the economy will be continuing to grow as everyone hopes,

but it will be far harder for asset prices to continue to rally.

If, however, the central banks lose their nerve, and we continue to see liquidity,

we haven't seen peak liquidity,

then that would be much more positive for asset prices.

But the bad news would be that, presumably,

economic growth isn't going quite as well as hoped.

Either way, this is perhaps the most important question for markets in 2018:

have we really seen peak liquidity?