14. Conclusion: A High-Water Mark?

The developing rivalry between American and Chinese capital likely compromises the future development of Global Liquidity. This threat could result in a new focus on regionalism that defines exclusive areas of US and Chinese influence. The demise of the Bretton Woods system, paradoxically, has resulted in greater use of the US dollar in the international economy. China’s weakness is that she leans too heavily on the US unit and now badly needs to internationalise the Yuan. China’s financial underdevelopment is a risk for World financial markets, which have become hugely procyclical, partly as a result. The deindustrialisation of the West has emphasised the capital distribution and refinancing dimensions of financial markets, where the capacity of capital outweighs the cost of capital. Consequently, Central Bank liquidity provision and safe asset are critical for further financial stability. Is this Peak Liquidity?