The U.S. must be doing great. Check out the graph and all the money the Feds have! All the world’s central banks have similar balance sheets.
The world’s banks are printing money or swapping assets at a rate that is unequaled. Their balance sheets have vastly improved based on absolutely no improvement in the way the governments perform in spending and controlling debt, but that is what central banks do – it’s the nature of the beast.
Quantitative easing appears to be alive and well. The balance sheet is growing as the bank reserves (assets) increase out of thin air.
Quantitative easing (QE) is a type of monetary policy used by central banks to increase the liquidity – supply of money – in the economy when the interest rate is at or close to zero. The central bank prints money so they can loan it out and increase the supply of money in the economy to give it a boost.
More specifically, the central bank (the Feds) first creates money out of nothing. It then purchases financial assets (bonds for instance). These purchases become account deposits and give banks the excess reserves they need to create new money by a process of deposit multiplication from increased lending in the fractional reserve banking system. This increase in the money supply (through loans) then stimulates the economy. Read more: QE
The zero interest rates are going to continue for another 18 months despite the risk of inflation. The government believes the economy is stabilized so why continue issuing money to everyone at very little interest? The Feds are using inflation targets that are so fudged they are meaningless.Read more: goldmoney
The risk of inflation is great especially since they way they count inflation greatly undervalues it, but it’s going to keep the economy together through this year.
Could all this have anything to do with the upcoming election?