The combination of low overnight ES balances and greater recourse to intra-day repos is a more efficient, and
less costly, approach to
liquidity management for banks,
compared with the situation in July with relatively high ES balances and low intra-day repos.
Much of the debate over the past years about the benefits and the costs global specialization, primarily the rapid advance of China as a major manufacturing center has been
less about the financial costs — the $ 12 trillion dollars of additional
liquidity that the US consumers offered to the world (the cumulative US trade deficit from 1990 through 2015
compared to the over $ 3 trillion dollars in trade surplus run - up by China over this same period — and more in terms of the jobs lost and the impact of foreign products on American wages in manufacturing.