🔥 THE EXPLOSIVE GLOBAL MONETARY LIQUIDITY: RECORD INJECTIONS FROM INDIA, CHINA, JAPAN, AND THE USA 🔥
Central banks are flooding the markets with fresh liquidity, creating an ultra-bullish context for risky assets like stocks and crypto.
In addition to India, China, Japan, and the United States are accelerating massive injections to counter inflation, support growth, and stabilize financial systems.
The Indian RBI announced yesterday, December 23, an injection of ₹2.90 lakh crore ($32 billion) through OMO purchases of bonds for ₹2 trillion ($24 billion) (in 4 tranches until January 22, 2026) and a dollar-rupee swap of $10 billion for 3 years.
This adds to ₹6.5 trillion ($76 billion) of bonds purchased in 2025, an absolute record, to stabilize banks and the rupee.
The Chinese PBOC has pumped over CNY 10 trillion ($1.4 trillion) into the 2025 markets through MLF and reverse repo, with monthly net injections like CNY 100-300 billion ($14-42 billion) (e.g. November: CNY 1 trillion gross/$140 billion, net +CNY 100 billion/$14 billion).
From mid-2024, accumulation of RMB 8.7 trillion ($1.25 trillion) for growth and government bonds.
The Japanese BOJ, despite raising rates to 0.5-0.75%, maintains QE with JGB purchases of ¥3 trillion/month ($20 billion/month) (tapering from ¥400 billion/quarter/$2.7 billion), backstopping debt at 260% of GDP.
Last week, the Japanese government approved a stimulus package of ¥30 trillion ($200 billion) for 3 years, financed by fresh bonds and direct injections for infrastructure, investments, welfare, and post-inflation growth.
The US Fed ended QT in early December, stabilizing its balance sheet at $6.5 trillion with reinvestments and "Reserve Management Purchases" of T-bills ($40 billion/month), injecting net liquidity.
Why bullish?
This global liquidity (~$3-4 trillion net in 2025, including fiscal stimuli) lowers yields, inflates asset prices, and stimulates risk-on: crypto benefits from the correlation with stock indices rallying towards historical highs.
