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Sitting on the desks of central bank governors and regulators across the world is a scholarly report that explores the vertiginous scale of global debt in U.S. dollars, and gently hints at the horrors in store as the U.S. Federal Reserve turns off the liquidity spigot.

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The question isn’t whether there will be spillovers — it’s how big they will be, and Canada is among the countries that could be hit the hardest.





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This dry text is the talk of the hedge fund village in Mayfair, and the stuff of nightmares for those in Singapore or Hong Kong already caught on the wrong side of the biggest currency margin call in financial history. “Everybody is reading it,” said one ex-veteran from the New York Fed.

The scholarly paper — “Global dollar credit: links to US monetary policy and leverage” — was first published by the Bank for International Settlements in January. It shows how zero rates and quantitative easing flooded the emerging world with dollar liquidity, overwhelming all defences.