YMI - Yamamoto International has written to clients alerting them to the inevitability of a massive new, coordinated round of liquidity injections and quantitative easing from the world’s central banks.

Describing what it called a “confluence of events”, the Asia-based investment house advised clients to position themselves for unprecedented liquidity injections designed to ward off deflationary pressures and stabilize equity market turmoil.

“The scale of worry over China is disproportionate to the real state of the country’s economy on the ground,” said a YMI Yamamoto International strategist. “China’s not on the brink of collapse but global equity markets and commodities appear to be locked into steep declines and we believe the world’s central banks will eventually feel compelled to take some kind of action,” she added.

Worries over China, falling oil prices and anemic global economic growth is increasing pressure on the Federal Reserve to postpone plans to raise US interest rates for the first time in almost a decade even though unemployment in the country has fallen to its lowest percentage rate in 7 years.

YMI Yamamoto International believes that, by the first quarter of 2016, this call for a postponement of rate hikes will have morphed into a clarion call for further monetary stimulus aimed at kick starting the global economy and combating deflationary pressures from falling prices.

“We think it’s a good idea for investors with a longer-term outlook to take positions in stocks because QE or liquidity injections will almost certainly find their way into the equity markets. We also advocate holding precious metals because, although evidence to date would suggest otherwise, money printing is, indeed, inflationary,” explained the strategist.