Why will liquidity increase next year?

Answer 1

Because the Fed is going to print the money they need. Do you remember that in March 2006, the Fed stopped reported M3 Money supply numbers? I believe it's because the fed wants to mask it's money printing activities. Monetary liquidity is a function of fed activity (or central bank activity in general). You must remember, what's been driving the U.S. and world economies in the last 5+ years or so has not been productivity, but monetary liquidity. With the dollar dropping and few investors buying U.S. debt instruments, to make up for the short fall, the fed is printing the money they need.

Answer 2

What happens, is when the US Federal Reserve is instructed to increase liquidity, it goes into the open market and "buys" treasury securities as it is instructed.
It might be in the form of "repo's" or other instruments.
Doing that, puts more "liquidity" into the system.
The opposite drains "liquidity" from the system.
Equities[stocks] tend to dramatically respond and demonstrate this, by responding to the amount of purchasing power available.
Liquidity, in a sense of equilibrium, may or may not increase. This last May and June demonstrate what happens when "liquidity" is reduced.

Answer 3

Interest rates are going up so there will be more cash sitting in short-term cd's and money market funds collecting safe returns of 5%+.