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Fed Balance Sheet Increases By $50 Billion In One Week, $100 Billion In One Month, $1 Trillion In One Year
Five years after the "recovery" began, the Fed continues to monetize more debt as part of QE3 than at any time in history, and certainly more than during QE1, Twist, and QE2, as can be seen on the chart below (remember: all that matters is the flow, as we noted well over a year ago, and as even the Fed has finally realized).Why is this important? Because as even the Treasury has now admitted, the Fed's daily liquidity injections are all that matters. Of note: in the just completed week, the Fed's balance sheet increased by over $50 billion (again, in one week), by $100 billion in the past month, and by just shy of $1 trillion in the past year. Incidentally, this is "money" that continues to not make its way into the economy, and every single "reserve" dollar created by the Fed in exchange for monetization, is used by banks to ramp asset prices to now daily record levels.
And since in a centrally-planned market self-fulfilling prophecies always come true, and Fed balance sheet correlation is causation, the reason why for the second day in a row we have seen panic buying is because as we noted last week...
.... stocks have still substantial catch up (now certainly less than a week ago) to the "fair" Fed balance sheet implied fair value.
However, all that matters to the BTFATHers, is that a $4 trillion Fed balance sheet, which is where it will be on December 31, implies 1800 on the S&P.
Do it for the "wealth effect"... if only for some.
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Taper...LOL
Nice. The only metric we need for the Economy.
All of that non-money without significant velocity not exchanging hands and not filtering into the economy at large.
We're rich!
What's velocity? Seriously, the average guy on the street has no fucking idea what that means.
Velocity is irrelevant as the "guy on the street" will do whatever it takes to survive. See my comment below and get long black markets and sharecropping before the rush.
There have been a lot of changes, lately. Is $50,000,000,000 much money these days?
Define "money". The money that you are referring to can be "created" in a microsecond out of thin air. The real eCONomy requires calories, which cannot be created out of thin air.
The good news; We will all be trillionaires!!
The bad news; We will all be trillionaires!!
They really need to take the FED public - talk about an undiscoverede little gem... GAARP - Growth At A Reasonable Price
Unfortunately, the math behind this is exponentially destructive. Look at the markets now, 85 billion in monetization per month is no longer enough to enable propping up equities, surpressing PMs, and putting the necessary bid under bonds to drive interest rates down. Look for backdoor/extreme measures by the Fed/treasury to increase the heroin drip.
Boris is recommend long on wheel barrow and printer ink.
re balence sheet, not really because it spent all that fiat on bad mbs and treasurys that will go bad so mark to market its balance sheet is worth jack shit. unfortunate, for the savers they stole the money from in the first place through devaluation/inflation.
Apparently neither does the Fed.
The average guy on the street is busy being programmed to be grateful for the part-time, wage-suppressed, no benifits nation we've spent trillions on creating. If money spent on an ideology measures its success, then we are not only rich but incredibly successful.
+1 for you Bay.
The 'average guy' is the collateral(chattel) for all those trillion$.
He just doesn't know it...yet.
Bingo (I see someone read the federal reserve act). They better disarm him before he finds out...
sorry...I was taken in by a fake speech.
Still there were real warnings long ago...McFadden for one.
Chattel is for now, but when War of Bankster commence, "average guy" is to become fodder for cannon.
Amerika citizenry is cannot expect continue borrow, borrow, borrow, and sustain false lifestyle of iPhone, Big Screen TV, fancy hand bag while employ labor in fruitless enterprise and useless bureaucracy. Some time is must tire to hit road, and time is here, now. Too bad is suck whole damn planet down together in economic spiral of death.
Hey, why is down arrow Boris!? What is hate on Boris!? Is not Boris true in statement!? Truth of Amerika is hurt?!
Never to mind, Boris is accident down arrow self...
This is the largest misallocation ( read theft ) of taxpayers money in the history of mankind. Time surely for citizens to take to the streets and show their anger. Protests are a daily happening in Europe - yet we all just accept this theft on a grand scale , shake our heads and dry our tears. Time for action.
I believe we have gone beyond tax dollars. So it is not taxpayers money anymore. All that remains to be done is for Federal Reserve Bank to declare bankruptcy (it's private anyway) and JP Morgan becoming the new central bank. Whose money was it to lose anyway ?
"Theft" is false kindly description, feel more is like "Rape".
King - Maybe taxpayers is not the right description . But all the debt the government / Fed creates is the debt , by default , of every American citizen. They are printing up debt that ultimately every citizen will have to bear the burden of , which includes every American child and even unborn future generations - They are in effect impoverishing this and future generations of Americans. The day an American child is born , he is indebted to the government . This economic and political regime of the mega rich , money masters must be stopped.
This money is not making it into the real economy BOP. That is all they mean by velocity. If it was prices would skyrocket. The banks are sitting on it, and not loaning it out. Not that anyone wants a loan anyway. The average guy can't afford a home anymore. Nor does he want to start a business. Maybe he wants a CC or an auto loan. The banks are happy to do that because of the interest rate they charge. But in the meantime the banks just use the money, and other sources of money, to drive the markets higher. Why not right? They basically get it for free,
The one rule though is no one is allowed to hit the cash register, Because if one does, they all do, and it is over in an instant. So it seems to me the only thing to do is play along, and occasionally hit the register and buy something real with it.
Of course fonz. Poor sarcasm on my part.
Mr. Fonz,
You are astute assessment. Central Bank balance sheet is not YET merge into general economic condition. Is to be stuck in "Bank-o-sphere", circulate between bankster class, chase other virtual dollar. BUT, when investor enough feel panic, brace self for descent of fiat currency into hard asset. Watch, at first is $1=$1... and then quickly shadow bank dollar is seek ANY tangible asset as financial elite is realize gig is up.
... but what is Boris know?
Exactly.
I thought for a LONG time that when the banks finally start to lend those reserves, bam, inflation-> hyper-inflation.
Now I realize because its the end game, and the banksters know it, they will use those reserves for asset purchases. Straight up. Whether that means equity stake in companies, or buying assets outright.
So just remember, if a bank comes to you, looking to buy assets, at least charge them an arm and a leg for it. And then convert the fiat to precious metals...
Yea, but asset purchases would pull the banksters back into the real world, and that implies risk. And they don't do risk assessment anymore. Put another way, they are gonna be loathe to buy into Something That Could Fail from their TBTF citadels. Then there is the regulatory and legal risk. Other sectors of the economy don't have captured regulators, judges, and prosectutors. I really don't think they are thinking beyond the next Q. If the Fed propping them out now, it will tomorrow too.
In addition this stuff - I believe a true forensic audit of the Fed would reveal that it is also a "day trader" of specific stocks for the obvious reason.
These transactions would be very deeply hidden - The reason for a just-as-deep FORENSIC audit.
There is no stigma attached to EBT anymore. I plan to apply for one. http://freebeacon.com/study-food-stamps-most-rapidly-growing-welfare-pro...
Apparently, its a benefit I am missing out. There are EBT brokers with quotas to fill. Let me help them out.
Boris can apply too? What is "zip code" for Minsk?
I think the folks at the high end are hitting the cash register. I think that's partly what this is really about. Stock market doesn't make sense? Then it has nothing to do with you.
Stock market is make perfect sense. Create by fiat, billion and billion of virtual digital currency, is must go somewhere... most is go first to bank, but bank is not just fill reserve vault, must place for investment somewhere, so is purchase best class of asset... stock. But some is also go to more conservative investment asset, like bond and commodity. Some day, not so in far future, small shock is induce sufficient panic and banker start by little, then by massive exodus, retreat from stock market to hard asset. At that day, Amerika and world will see hyper-inflation and before can even fill wheel barrow for trip to food market, absolute collapse.
Of course, maybe is WWIII break out first, but you are to see point, no?
"“The Federal Reserve is printing money”. No statement could be less truthful. The Federal Reserve (Fed) is not, and has not been, “printing money” as defined as an acceleration in M2 or money supply. Just check the facts. For the first quarter of 2013 the Fed purchased $277.5 billion in securities (net) as their security portfolio expanded from $2.660 trillion to $2.937 trillion. A review of post-war economic history would lead to a logical assumption that the money supply (M2) would respond upward to this massive infusion of reserves into the banking system. The reality is just the opposite. The last week of December, 2012 showed M2 at $10.505 trillion, but at the end of March, 2013 it totaled only $10.450 trillion which was an unexpected decline of $55 billion. Printing money? No. [...] Theoretically, as well as from a long-term historical perspective, a mechanical link between an expansion of the Fed’s balance sheet and these markets is lacking. It is possible to conclude, therefore, that psychology typical of irrational market behavior is at play."
Van R. Hoisington
Lacy H. Hunt, Ph.D.
The flaw of the paper is that it is quite literal in how it defines M2; take MBS and debt monetization and how this offsets negative assets on banks shadow books and the oppurtunity costs given asset to liability gaps of banks and how that 'capital' is used to gamble. The inflation is expressed in indices currently = more $$$ for the 10% parked in levitated stocks for a wealth effect, with stagnating more at plummeting M2V and aggregate demand, etc etc etc
It would seem that in order to baffle people with bullshit, a Ph.D. is required.
The liabilities are very real, and growing exponentially. Good luck with all those paper promises. Unfortunately in order to actually deliver a real service or commodity, you need calories.
The Laws of Physics and Nature will take these fucktards to the woodshed soon enough.
Same as it ever was...
It would seem that in order to baffle people with bullshit, a Ph.D. is required.
Piled Higer and Deeper is what we called it.
But seriously, I see it called a Ponzi but nobody seems to be calling it a Perpetual Motion Machine, which of course can't exist, while history shows plenty of Ponzis.
Ponzi schemes are illegal. Try wait, laws don't mattter any more. We have a puppet who murders people at whim, and they gave him the Nobel for Peace.
When are the stupid zombie proles gonna wake up?
I think it's coming soon when they realiize Obamacare is designed to transfer wealth from the working poor most of all, but everyone pays more so that the disease industry can gain more profits and more control over such a private matter as the doctor-patient relationship.
Of course it's designed to fail. We need martial law and we need it soon!
is this the taper you were looking for?
http://upload.wikimedia.org/wikipedia/commons/0/0c/Tapirus_terrestris.jpg
And main street continues to die
Fuck you, you thieving bastards, and fuck you to all the pricks who keep voting for the main parties.
I read the Krug today oh, boy
About a lucky man who made the grade
And though the news was rather sad
Well, I just had to laugh
He's batshit crazy...
“One vast and ecumenical holding company,
For whom all men will work to serve a common profit,
In which all men will hold a share of stock,
All necessities provided,
All anxieties tranquilized,
All boredom amused”
Network, 1976
That's where we're heading?
All I see is access to healthcare getting worse for the average person year by year, access to government pensions being pushed back year by year, wealth inequality growing year by year.
The evidence points to neo-feudalism ... but somehow it's all a conspiracy driving us towards communism?
There will be a point of diminishing returns. The S&P will not follow lock-step with balance sheet forever.
How do you know this? Are you in charge of anything, Dr. No?
No, Dr. You aren't.
Do you think that in increase in $1T per year is properly allocated capital? I dont have to be incharge to recognize a bubble nor hold the pin to cause it to pop.
-pointless.
MOAR!
"The Fed's balance sheet increased by over $50 billion (again, in one week), by $100 billion in the past month, and by just shy of $1 trillion in the past year."
Where did the extra $15 billion come from?
Blowoff Top! Dollar crashes, too! Epic!
there is more to come.
When will the sheep notice that the world has already moved away from the dollar and they are left holding the bag of worthless money?
At 25% a week price inflation.
A lot of people don't even know what something at the grocery store costs. What I mean is, any thing less than a 20% change in price probably goes unnoticed by over 50%!
When it happens ... which is when the US can no longer run a trade deficit.
Anybody want to bet on how much our oil imports drop when that happens?
Trickle Down Ecnomics on Steroids..only those with the cash to buy stocks at tard levels can enjoy the wealth effect and free Fed bucks. Evidently Ben realizes the average american could not even afford 1 share of Google..but QE is for the BUDDIES. And if the Buddies feel like breaking off a few Bennies for the peons than Whoopee doo.
Instead he has been robbing them for 5+ years at the savings accounts. It truly is a crime. If the average citizen had an iota and patience to spend just a few hours learning the mechanics of the wealth transfer and how it is implemented and by whom they would be out of their minds. Need more "Bread & Twerkuses" as someone coined on here a few weeks back.
They know there is no way to pay back the trillions of debt, so they are looting the treasury and, since that wasn't good enough, running up trillions more on the national credit card and pocketing it for themselves. Why not, if the whole shithouse is going to go up in flames anyway, loot the hell out of anything and everything, which is what they are doing.
The American people won't wake up until the rest of the world says "enough" and ends the dollar's reign as the world reserve currency. When that happens, it will trigger an immediate default and hyperinflation, and a depression that will make the Great Depression look like child's play. It will take decades for America to recover.
TPTB realize this full well, so that is why they are looting like hell right now, making off with everything they can while they have total corrupt control over Washington and Wall Street. They are using their ill-gotten gains to buy real assets like farmland and equity stakes in large multinational coporations, things that will set them up as the new elites, aka feudal lords, of the new system. Or just move to Switzerland or Singapore if the shit gets too bad here.
They are keeping the fantasy going as long as they can because they have never had all the power to enrich themselves like they do now. Every month they keep this going is another month of hundreds of billions of dollars into the pockets of the elites.
They know exactly what they are doing. THEY ARE LOOTING THE COUNTRY.
50 billion in one week?
They are talking staggering amounts of money here, and in just one week? Burning these fuckers alive is to good for them, they are going to cause one of hell of a backlash when this shit bubble bursts. Fuck me, monetizing 50 billion in one week, my flabber is ghasted, they really are insane.
This is a biblical amount of paper, with your and mines name wrote all over it. this is what indentured servitude looks like folks, and when the straw breaks the camels back, direct your anger accordingly.
Fucking staggering.
+1, and its good to see you Inthemix.
Cheers RS, and I hope you and yours are keeping well mate. Its going to be 'Epic', when this kicks off friend. 50 billion in a week? Monsterous springs right into my mind.
In our lifetimes we may just see armagedon, take it easy, and take care.
96 ;-)
I remember when jaws dropped at hearing about the $1 billion price tag on the B-2 bomber. Now we talk about $50 billion a week. Someone explain to me how this can possbily continue much longer.
Maybe they want to buy 50 B-2 bombers.
Hey, someone has to spy on the american people right?
And as we bask in the glow of potential unlimited spending until the fuckwits take a 2nd, or is it 3rd, 4th?, stab at the debt ceiling again. The ceiling is now a convertible spending vehicle piloted by a bunch of drunken monkeys in DC and no one can get the keys back...
http://www.heritage.org/research/reports/2013/10/suspending-the-debt-a-license-for-more-wasteful-spending-sources
http://www.dailymail.co.uk/news/article-2465544/Surprise-Debt-ceiling-deal-gives-Obama-blank-check-loophole-allow-government-spend-WITHOUT-LIMIT-February.html
you ever seen a drunk monkey.... good times, good times.....
I hope historians describe barry and harry and their operatives as the Funding Fathers of the failed American republic.
The MSM will not touch this topic. It' all unicorns and rainbows until essential commodities cannot be delivered and the next civil or world war begins. In this mark to fantasy/ fractional reserve system liquidity can be "created out of thin air", unfortunate calories (which you actually need in order to do/create anything of real value) cannot be created out of thin air. hedge accordingly.
This is actually quite a compelling argument for going all in long for the next six-eight weeks.
Figure they're going to ramp, so why not make some easy money? If I didn't despise the system so greatly, I might just load up on calls, but, I just can't bring myself to do it, the shit is so corrupt.
It'll be one hell of an asset prices crash when this BS ends... including gold and silver.
Great post. I agree that all assets will get slammed....however some will retain value.
The $ value will be irrelevant. What will matter is relative value.
Say S&P is down 66% and gold is down 40%.
Or RE is down 33%, but precious metals only go down 20%.
Don't forget, this ends, the price suppression ends as well.
paper or physical? Remember, when fraud is the status quo (as it is now), possession is the law.
How many final nails in the Dollar coffin is it going to take before its buried
Things are looking up!
COME ON MAN, BTFATH and stop worrying ;)
Paper wealth is staying in paper. This won't go on forever. It can't. At some point, even the rich will need to use their "money".
Someone really smart said that in 1971, wish I could remember his name.
Maybe after they use all of yours...
I dont have any.
Five years after the "recovery" began
ahahahaha!! There is a recovery that requires 1 Trillion in bond buying internally. What the hell is up, do these people all think we atre stupid like those who believed Obama?
News Anchor loses it for a good reason....
https://www.youtube.com/watch?v=A3BHujm3cpY
He better be careful with getting all worked up like that, he might have mysterious 'heart attack', or start feeling so bad that he shoots himself in the back of the head a couple of times.
Big caps starting to have earning problems now. IBM, WMT, CAT, etc. not sure sure that DOW isn't going to rollover from here.
Gideon Gono must be a proud man as the Federal Reserve Board has adopted the Zimbabwe Monetary model!
Why doesn't the Federal Reserve just buy the DOW or the S&P direct?
Just spare us the present theatre.
they already have (bought S&P futures, as their part in the PPT, Plunge Protection Team) and they will (the Fed's charter allows them to buy assets, stocks for instance), but that's separate from QE, which is an asset SWAP, and it involves good new treasury bonds for someone elses underperforming paper, but QE is only applicable according the USTs need to monetize debt. if the government shuts down, and there is no spending, or spending is greatly reduced, QE is reduced. the insanity then belongs to OBAMA AND BERNANKE, not the TEA PARTY. the only way to stop an unfair policy which creates more income disparity (QE) is to shutdown vital government services. this is like a shoplifter telling the cops you're going to have to kill me (but we know that rich sociopaths will do anything to protect their wealth) in this case they have created a financial doomsday machine.
can anyone project when the banksters will finaly own everything..have bought all that can be bought ? Is that years or decades away ?
Bankers own all the paper. Let that sink in a bit.
the wealth they have accumulated will cause a tipping point, at the moment that wealth begins to translate into political power. at any moment NOW! goldman and jpm could crash the market, and collect the rest of the wealth still sloshing around, and they could do this by shorting their own product. once they have crashed the market the Fed is gone, blown up, and now the political class is drifting without a paddle. they have money to put up their own candidate, you could say OBAMA already is. the process would be out in the open, complete and wholesale replacement of all goverment officials. they would own the country, and to be sure the eocnomy would run a lot better than it is now, because guys like OBAMA are just parasites with no vision. technocrats to be sure. my guess is they have enough coin to do it right now, it just takes some catalyst.
FRED graph I made a while back showing base money creation (Fed balance sheet size, red) vs various money supply figures vs total bank credit:
http://research.stlouisfed.org/fredgraph.png?g=nuO
Some of the lines are shifted to make the graph easier to read.
The public money supply figures are increasing (M1ADJ, M2, MZM), just not as fast as the increase in Fed money printing.
Total bank credit (orange) is barely increasing, and is supposed to represent commercial bank loans, which increases the money supply. Per a few older ZH articles, the figure I'm using, TOTBKR, overstates the amount of loans, and has barely increased, if at all.
(from article: "Incidentally, this is "money" that continues to not make its way into the economy")
man digital money is like monopoly; its fun to play. For those who HFT its ecstatic. Look at Buffet.
The Internet is good for drug dealers, porn merchants and banksters, like the real world has never been.
Guess what, Google, FB and Yahoo and all those others are now kings of the world. Guaranteed full global access by NSA squads and MIC hitmen they are the face of NEW AMERICA; plutocrats.
Digital heaven of the pristine Internet will now become NSA prison that Congress ensures stays that way; for Google and all the rest.
Thats called method in your printing madness!
+1
Why in the hell were you talking shit about Blue/Red, Left/Right false paradigm nonsense then yesterday?
lol, ruffled feathers. You are IMO mixing content of message and format for legislature.
I don't confuse what I personally feel are my own private opinions with how the great game is played in Congress. Out there its high stakes gambling and those guys have to be pros if they want their message content to be understood by the general public...THE GENERAL PUBLIC IS NOT ZH...
I didn't invent the feeling that this show backfired for the TP, as the Tylers have picked up in the post on "What happened Boehner?" That guy now wears the hat for a legislative botch up.
You cannot deny that this whole thing was a false hubristic move by the TP and it back fired.
Just read this : I know its BI but it does portray the tone of all those who have voted Red in the USA : Repubs lash out at TP for 16 days of shutdown.
If this is a protracted planned move by the TP to take over the GOP; oK, so be it. But its brinkmanship of very dangerous type.
Once again I don't confuse what I hold as my opinion with what is happening out there.
If the US govt. tanks the world goes into tail spin big time. Think about that. Its better that it arrives under its own momentum than under a "young TP turks" putsch, 'cos that could have incalculable collateral costs for the US political system.
Thats the bottom line. If the US goes into a dot.Com 2 financial crisis so be it; under its own hubris, not under the ukaze of a pressure group that could push the US political system into gridlock along with a concomittant world financial crisis.
That's playing with FIRE. Just my reading of geopolitics as opposed to personal opinions.
once the internet is totally wireless, the NSA and Google will have lots of competition. going wireless allows competitive services to set up their own servers away from the existing telephone grid, encrypt the signal and offer privacy and security.
U.S. Companies want the dollar low. Think about it for a second. The only way stocks can continue to appreciate in value at these levels(nominally) is for the dollar to be worth less. We all know that demand for their goods and services is declining.
Additionally, we all know Q4 earnings are going to be in the shitter and most large U.S. Companies do 50% of their business outside of the United States. They want the dollar low so that their profits are inflated when they exchange their overseas earnings for dollars.
It's a giant circle jerk ponzi scheme!
Goin' with the flow; right down the drain. http://tinyurl.com/k7gn4p5
Bad things can happen when you fuck around with asset values.
That is nothing. The base money supply exploded by 100 B in the last two weeks.
http://research.stlouisfed.org/fred2/series/BASE
975b in less than 11 months.
and whenever money supply goes up velocity goes down. and when velocity goes to zero what have you got?
...a bidless currency. Go long black markets and sharecropping, beat the rush.
Warning to investors. FED balance sheets can go down as well as up.
Watch out when those treasury yields start rising.
In theory. But in reality, that garbage is there to stay and will only multiply. Even a fully recovered economy could not stand that toxic poison of a balance sheet being injected into it's veins.
MOAR debt! Speaking of which check out the leverage ratios of the Australian banks.
Disaster waiting to happen. Oz treasurer, a fat fuck with an investment banking wife, says there's no real estate bubble and outsiders don't understand the Australian real estate market.
ANZ CBA NAB WBC Sector
Mortgage exposures 255,208 418,544 283,366 399,982 1,357,100
Mortgage risk weighted assets 43,664 63,637 56,686 58,041 222,028
IRB-calculated mortgage risk weight 17.1 15.2 20.0 14.5 16.4
Implied capital held @ 8% Core Tier 1 (APRA) 3,493 5,091 4,535 4,643 17,762
Implied leverage ratio 73.1x 82.2x 62.5x 86.1x 76.4x
Implied capital held per $ exposure $0.014 $0.012 $0.016 $0.012 $0.013
Source: UBS
I still believe that the rest of the world sees what the USA is doing and has to be making other plans....at least I think they should be....some will just follow along on our coattails...but others will be proactive and change out before the crash....I hope so....for a small country to hold a lot of US dollars they will get burned....FX will screw them up
Rich people will begin to cash out. What will they buy?
The Fed is the banker for the current US deficit. So the money is going into the economy. Other money may be leaving the US universe, but it is wrong to say that the Fed is not banking our economy.
Print until the US dollar implodes. The US dollar failure will come quickly.
The fed's, William Dudley's, deviat plan is to Zimbabweize the US stock market. Crashing the US dollar going forward.
Unfortunately there is no turning back now. They must print to pay for deficit spending.
Hell, they must print just to pay the interest in all the past deficit spending. And print to buy gov't bonds to keep interest rates from rising because even the interest on the debt in a free market is too much for them to pay at this point. They have to print to keep the shitshow going for as long as they can before they quietly leave town with all the nation's wealth.
Fed's balance sheet is like it's member banks. Fantasy.
sooner or later this money will trickle down. Reagan said so, as did Greenspan, and Benrnanke and ...
Someone wrote the Federal debt snapped 328 Billion Thursday. Wait till you see next weeks report ..... Baaahaaaawaaaahaaaahaaaa.
Wait untill you see some of those fucking clowns putting the S&P500= 2000 caps on