Fed Intervention For Dummies - What A Record $3 Trillion In Fed Assets Gets You

Tyler Durden's picture

At the heart of it, visualizing the record $3 Trillion Dollar Federal Reserve balance-sheet is practically impossible. However, in two simple charts we can easily visualize what impact that gargantuan amount of printed cash has had on the 'real' economy and the 'real' market via Bernanke's magic wealth-effect. Presented with nothing to add...

The Market vs The Jobs...


and the real wealth effect...


(h/t @Not_Jim_Cramer)

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Xibalba's picture

"I won't let the facts stop me" ---USSA.GoV

max2205's picture

TD add the start of each jawboning frontrunning ramp for reference...cock suckers!

flacon's picture

So the stock market is a hedge against inflation? Better than gold? Better than Silver (which is still at the same price it was two years ago)...... oh how they manipulate things, eh? 

spastic_colon's picture

the true "wealth effect" inflation adjusted only begins above a certain equity level and the fed knows this, so under current "real" inflation that ES level is still well above 1500.....we were all "wealthier" the last 2 times we were at these levels

ZerOhead's picture

I might be guilty of skewing the numbers just a tad since five of those new recovery jobs are mine...

Medea's picture

Two for me! Whaddafuq.

Joe Davola's picture

You go guy!

Really, you better go, you're probably late for a couple of those jobs.

TruthInSunshine's picture

The stock market indexes ARE ALL BERNANKE HAS as his failed legacy (aka 'VIRTUOUS CIRCLE' ALCHEMY), and he and his apologists can now ONLY cling to the artificial and TRANSITORY (mark not my words, but the inevitability of the fate of such artificial bubbles blown by digitized fiat) "stock market rally" that he has inflated as the last, sole claim that his monetary policy bore (rotten) fruit.

The Bernank is now literally trapped. Look at the real economic conditions in the U.S. and the polls that reflect that the a fiat-juiced equity market rally (that will implode) is and never will be enough to stop the genuine and rapidly declining economic conditions, nor the genuinely terrible and declining national mood regarding the health of the real economy (as people witness the real time degradation of the economy).


trav777's picture

printing ain't fucking stoppin...either bitch about it like ZH or get on board and do what you gotta do

TruthInSunshine's picture

Printing with reckless abandon always and will forever lead down the same road. It's not about bitching, but making sure people notice the pattern and inevitable outcomes:

The Harvest excerpted from the book The Creature from Jekyll Island

When men are entrusted with the power to control the money supply, they will eventually use that power to confiscate the wealth of their neighbors.

There is no better illustration of that law than the Crash of 1929 and the lingering depression that followed.


During the nine years before the crash of 1929, the Federal Reserve was responsible for a massive expansion of the money supply. A primary motive for that policy was to assist the government of Great Britain to pay for its socialist programs which, by then, had drained its treasury. By devaluing the dollar and depressing interest rates in America, investors would move their money to England where rates and values were higher. That strategy succeeded in helping Great Britain for a while, but it set in motion the forces that made the stock-market crash inevitable.

Clowns on Acid's picture

Agreed Spaz  - but in hyperinflation equities may be better than anything except pm's

Papasmurf's picture

That may be true except for the counterparty risk of your equities being held by DTC.

Clint Liquor's picture

Historically, the Stock Market did not do well during periods of high inflation. The myth that the Stock Market protects your wealth during inflation is propagated by the fleecers of investors more commonly known as Stocksuckers.

SafelyGraze's picture

as long as you keep employment low, you can keep prices low

at least, prices on things that employed people might purchase

spastic_colon's picture

exactly or at least in theory, in this way consumption and potentially inflation can theoretically be "controlled".  which begs the argument, wouldnt the market and employers be able to do this on their own? why hire if demand is low thus keeping wages out of circulation.

daxtonbrown's picture

The concept of GDP loses meaning when the Fed Gov makes up 24% of GDP. All the Solyndras and welfare boondoggles are not additive to production no matter how Helicopter Been jiggers the books.

Caveman93's picture

We NEED to build that damned Death Star!!! Look at the no move on NFP Lulz!

philosophers bone's picture

What was the explanation for the decline in Fed Reserve Assets in 2012 again?

LongSoupLine's picture

What it got us?

A ton of fucking pain and suffering for future generations.

Fuck you Bernanke, prick.

Clint Liquor's picture

All the Geezers hope the 'Future Generation' has to pay. But it will be the current generation whose wealth is blown away along with fiat currencies and derivatives.Good for the 'Future Generations', it's not their fault.

SheepDog-One's picture

I can't wait till the morning all these 401K and pensioners see that all their 'wealth' they sold out for is also gone!

DosZap's picture

I can't wait till the morning all these 401K and pensioners see that all their 'wealth' they sold out for is also gone!

Sold out for?, as in most have no CHANCE to remove them?,they/most  cannot remove them.

All these SO called Sell Out's worked their asses off for 30-40+ years on a promise that they were protected,(they earned it for the vast majority) and as in every generation past did also.

At least they saved.

You should be more concerned about the DONE nothings still at the trough, and get all this free shit, FOR never being productive or spent an hour working or saving.

syntaxterror's picture

My god, imagine if GDP year over year growth were 5% instead of under 2%! The Dow would be at 30,000!

francis_sawyer's picture

so would a can of grandma's catfood...

Bam_Man's picture

It gets you a stock bubble and a bond bubble at the same time.

When they have blown another housing bubble, they will be 3-for-3 and declare victory.

inevitablecollapse's picture

shit...if you go 1-3 through an entire career, the HOF will be calling you.  3-3 is altogether on a different level.  fu bb, fu jd, fu bo, fu tg, and on and on

101 years and counting's picture

from Jan 21, 2009-Dec 31, 2012, obama added 5.84 Trillion in debt.  a normalized 3 week period would add another 90B.  since obama was sworn in, the US has added 5.93 Trillion in debt.  all that to grow the economy 0%.....once you back out inflation, growth is, in fact, 0.0000%.

Overfed's picture

Once you discount inflation, I suspect growth has actually been negative.

ceilidh_trail's picture

I see banksters coming out on top. The common man? Not so much.

valkir's picture


youngman's picture

They are just waiting until the unemployment number hits 6.5%........lol......could be a few more trillion though

Wilcat Dafoe's picture

Fret not - the Neocons who are still, along with the banks, controlling the American government and its intelligence agencies, is going to pay for all of this with North African oil and gas and gold - where our SOFs will be greeted as liberators.




Amazing...  The same sort of chickenhawk neocons who infiltrated the Office of Special Plans to lie us into Iraq are still around.

And let's pull off this bandaid quickly - they're just about all Zionist Jews.

PAWNMAN's picture

More government intervention = less growth


steve from virginia's picture




(Sigh ...)


There is + $3-4 trillion in deleveraging taking place within the US economy ... The balance sheet addition is this deleveraging being shifted to the central bank which can sustain (paper) losses indefinitely without ill effect.


If the banks sustain these multi-trillion dollar losses they fail taking other banks and businesses with them. I'm not saying the banks should not fail but the consequences of doing so are profound ... and ill considered.


The $3 trillion is a 'phantom' there is no 'money' added anywhere, it's an accounting artifact. You can see for yourself that this is so ... despite the claims for 'money printed' why is everyone broke?



HD's picture

LIESman? That you man?  Love your comedy bits on CNBC.

francis_sawyer's picture

 "despite the claims for 'money printed' why is everyone broke?"


Blankfein & his cronies ain't broke... They're buying $33 million dollar shitholes in East Egg, sending their kids to Haaahvud, & systematically stealing gold off the Comex shelves... [You must have missed that story on CNN]...

Sauk Leader's picture

No he is too busy filling Herbalife orders.

spanish inquisition's picture

 despite the claims for 'money printed' why is everyone broke?

It has been a week since Jamie Dimon has checked his pockets.....

LawsofPhysics's picture

"Banking is like a jet engine, too complicated for you debt slaves to understand" - Jamie Dimon.

Joe Davola's picture

OK, but have the banks written off the trillion's of dollars in losses that the freshly minted dollars take the place of?

css1971's picture

Because Japan is a fabulous model to follow. Zombies 4 ever!

HD's picture

Three trillion equals 800 S&P points. Sure we could have had a new electric smart grid, or a cure for cancer or hell, put a man on mars.

Nope. 800 S&P points...and what are we left with when a black swan flies away with our manipulated rally to the moon?

Dr. Engali's picture

It sure is a lot of "money" that's been pissed away. It's sickening to think of the things that could have been done with it....that is if it were real money to begin with.

perelmanfan's picture

Yeah, how about solar on every sunny rooftop in the U.S., rendering the country energy independent for the next 30 years? Naw, fuck that, let's give it all to Blankfein...

hooligan2009's picture

check out the empty spaces in the vast majority of offices between 7 pm and 7 am that could be used for converted to tother things with just alittle planning


how about the massive amount of wind power in the big cities from the wind tunnels created by the office blocks..that runs all night over 60 floors (if anyone can be bothered to stick a turbine on it).

GoingLoonie's picture

What is the market value of the entire S & P?  I want to watch when the Fed is the sole owner of the entire S & P.

Banksters's picture

Donde esta the shovel ready jobs?