A dollar deleveraging cycle. Evidence is rapidly emerging that an intense dollar deleveraging cycle has begun within the Emerging Markets. Following what had in effect been a 15 year long dollar based credit boom in the EM and Southern Hemisphere economies, we find that the weakness in global (dollar denominated) GDP growth has undermined the ability of the global economy to support all of the dollar debt that has been created within the global economy since the late 1990s. Indeed, the debt burden has already begun to cause financial stresses in the EM (witness the recent actions of the PBoC and MAS) and therefore we are now seeing the first signs of a profoundly deflationary deleveraging cycle emerging. In the near term, this cycle may provide further support to the USD but over the medium term it represents a threat to asset prices globally. Consequently, we wonder whether the FRB will have to introduce QE4 as a result? Full report available on request.