Global Liquidity Index (Lagged)"Global Liquidity Index (Lagged)" by aggregating data from various central banks and money supply sources. IT IS NOT A FOOLPROOF Index
Central Bank Balance Sheets:
FED (Federal Reserve System): request.security("USCBBS", "D", close, currency=currency.USD)
Why Included: The Federal Reserve is the central bank of the United States, and its balance sheet directly reflects its monetary policy actions, such as quantitative easing (QE). Increases in the Fed's balance sheet generally indicate increased liquidity.
Data Source: "USCBBS" likely refers to a TradingView symbol representing the Fed's balance sheet.
TGA (Treasury General Account): request.security("WTREGEN", "D", close, currency=currency.USD)
Why Included: The Treasury General Account is the U.S. Treasury's checking account at the Federal Reserve. Changes in the TGA affect the amount of reserves in the banking system. Increasing TGA, decreases liquidity.
Data Source: "WTREGEN" is the tradingview ticker.
RRP (Reverse Repurchase Agreements): request.security("RRPONTSYD", "D", close, currency=currency.USD)
Why Included: Reverse repurchase agreements are used by the Fed to absorb excess liquidity from the financial system. Increases in RRP balances indicate a reduction in liquidity.
Data Source: "RRPONTSYD" is the tradingview ticker.
ECB (European Central Bank): request.security("EUCBBS * EURUSD", "D", close, currency=currency.USD)
Why Included: The ECB is the central bank of the Eurozone, and its balance sheet reflects its monetary policy in the Eurozone.
Data Source: "EUCBBS" likely represents the ECB's balance sheet, and EURUSD is used for currency conversion.
PBC (People's Bank of China): request.security("CNCBBS * CNYUSD", "D", close, currency=currency.USD)
Why Included: The PBC is the central bank of China, and its balance sheet reflects its monetary policy in the world's second-largest economy.
Data Source: "CNCBBS" likely represents the PBC's balance sheet, and CNYUSD is used for currency conversion.
BOJ (Bank of Japan): request.security("JPCBBS * JPYUSD", "D", close, currency=currency.USD)
Why Included: The BOJ is the central bank of Japan, and its balance sheet reflects its monetary policy in a major developed economy.
Data Source: "JPCBBS" likely represents the BOJ's balance sheet, and JPYUSD is used for currency conversion.
Other Central Banks:
The code includes data from various other central banks (e.g., Bank of England, Bank of Canada, Reserve Bank of Australia).
Why Included: To capture a more comprehensive view of global liquidity.
Data Source: TradingView symbols representing the respective central bank balance sheets, with currency conversions.
Money Supply (M2):
USA (USM2): request.security("ECONOMICS:USM2", "D", close, currency=currency.USD)
Why Included: M2 is a measure of the money supply that includes cash, checking deposits, and other easily convertible assets. It provides insight into the amount of liquid funds available in the economy.
Data Source: "ECONOMICS:USM2" is a TradingView symbol for the U.S. M2 money supply.
Europe (EUM2), China (CNM2), Japan (JPM2), and Other Countries:
The code includes M2 data from various other countries.
Why Included: To capture a broader view of global money supply.
Data Source: TradingView symbols representing the respective countries' M2 money supply, with currency conversions.
Rationale for Inclusion:
The goal of the index is to capture the overall amount of liquid funds available in the global financial system.
Central bank balance sheets reflect the actions of central banks to inject or withdraw liquidity.
Money supply figures reflect the amount of readily available funds in the economy.
By combining these data sources, the index attempts to provide a more holistic view of global liquidity.
Important Note :
The accuracy of the index is limited by the availability and accuracy of the data provided by TradingView.
Economic data is often released with a delay, so the index will always reflect past conditions.
The weighting of the different data sources is simplistic, and a more sophisticated approach would be needed for a more accurate index.
