Thursday, March 15, 2007
Liquidity and Credit are oftn confused
Kaufman had no words of reassurance. But Dr Doom did have a clear diagnosis.
The problem lies in the changing definition of liquidity. After the war, liquidity was an “asset- based concept” – companies’ cash on hand and so on.
Now, Kaufman said, “firms and households alike often blur the distinction between liquidity and credit availability.
Money matters but credit counts”.