$10 Trillion In 2 years - 'Over' Abundant Liquidity And Expectations

Tyler Durden's picture

A funny thing happened while we all waited for the Fed to announce QE3. The rest of the world did it for them. Courtesy of Bloomberg's excellent Economics Brief, and the n'th time, here is what a multi-trillion dollar liquidity expansion looks like even with the Fed running silent. And this is also what $10 trillion in 2 years pumped into the markets looks like. Wonder where the market gets its "spring step" from? Now you know. Thank you Economist PhD's!


We do note that EUR strength recently (as the ECB appears done for now) and the acceleration of asset prices in Europe (bank stocks, credit etc.) appear to have done a good job of discounting the next LTRO already - and in fact are starting to retrace as LTRO 2 expectations are ratcheted back from the cajillion EUR level as the stigma continues to rise, ECB members raise concerns over dependency (banks are not forced to delever and also will not re-engage in the inter-bank lending market), and just like last year perhaps the ECB will hike rates to stall inflation fears (thinking of all-time record local currency gas prices as transitory is hard after a persistent 3 year trend higher).


Charts: Bloomberg

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Ivanovich's picture

Really?  You think the ECB will go back into a tightening mode?  I think the harm that does the PIIGS will be much greater than any inflation control they attempt.  Hiking drives up the EUR and the USD down, which spikes crude.  So do they have any real effect on oil prices anyway?

GeneMarchbanks's picture

They might hint at raising, doubt they'll actually go through with it.

Somehow I get the feel all this is tied to Greece and the upcoming events there.

old naughty's picture

check out the story of NY-Fed, HSBC, and Yohannes Riyadi


a 3X5 T (dollars) allegiately transferred from NY-Fed to HSBC-London, on ccount of Riyadi?


interesting stuff.

quebecgold's picture

Let’s play!

Let free the Tyler Durden in you! Today (02/24) everyone tweets ‘’Greece Defaults’’ on twitter at exactly 10:03 (ET).

It’s time to see how bad the Algos will react to this storm of tweets.

Respond to this message saying you are IN!

willien1derland's picture

All in! (Tyler Style BITCHEZ!)

French Frog's picture

A better time might be (to throw the cat amongst the pigeons) just before the fake Uni of Michigan Consumer Sentiment at 09.55 and the New Homes sales at 10.00 ?

mayhem_korner's picture



Y'might wanna ignore the knock at the door at 10:04.

SheepDog-One's picture

 Now THATS what Im talking about! We are legion, we have all this shit like Twitter, lets put it to use and send out thousands of Tweets saying 'Greece has defaulted and bondholders get zero'! Send the algos into hysterics.

EHM's picture

Fight club is now Project Mayhem.

JPM Hater001's picture

What am I typing? #Greece Defaults?  Or just "Greece Defaults"?

forward ho's picture

So in. might as well spread our own brand of (truth).

forward ho's picture

So in. might as well spread our own brand of (truth).

LawsofPhysics's picture

Many here have been pointing this out for quite some time.  How gold is not $15,000 an ounce is a mystery (gold is the world's default reserve currency - tradition).  In addition, ZIRP is another name for QE, but beware, there is a very real cost for creating capital without adding any real value to the system.  Long commodities for sure.

Jason T's picture

Triple Curve Bitchez!!  The monetary aggregates take over the financial while the physical economy collapses.  

mayhem_korner's picture

The rest of the world did it for them.


Didn't the Fed "accommodate" via steep discounts on currency swaps (and a wink & nod from chopper Ben)? 

mayhem_korner's picture

<< "Central Bank" is grammatically correct.

<< "Central Banks" is grammatically correct.

Atlas Shrugs's picture

"You are so money and don't even know it." - Movie quote from Swingers

babylon15's picture

This is pretty misleading.  QE2 ended June 30, 2011 and according to this graph the global money supply was around 58.5 trillion.  Today it is around 59-59.5 trillion.  Most of the expansion during this graph was during QE2 (Q3 10 - Q2 11), not post-QE2 as the title implies.

Tyler Durden's picture

Swing and a miss. But good try.

kindape's picture

so we went from 48 to 59 trillion (in your Bloomberg graph) since Q2 2009. What did global GDP do over same period??

Apocalicious's picture

But, but, but they promised a 1.5 X multiplier...

mayhem_korner's picture



Sure...every $ of liquidity produces 1.5x price increase.

Spigot's picture

Point being that GDP numbers are crap anywhere you get them. The money went to filling galactic sized black holes at the top tier financials while they tried to figure a way to screw everyone else. Heck, do you recall that Wall St gave bonuses equal to 8% of M1 in 2009? (IIRC). This has to go much further on two fronts: enough free liquid to keep the top tier functional at the same time that they force debt liquidation on everyone below them. Do you notice what the ECB just did? Getting a clue there?

Irish66's picture

Do I have to wait for stupid to go long before I do the opposite on the euro?

slaughterer's picture

Wait until EUR/USD 1.36 at least to start shorting. 

dcb's picture

you gotta provide libks to mmore data. I want to see them on bloomber, and can't find it, or if it comes with an article please. I am attemtping to convince other people in regards to things and only having ZH sources makes me very susptet.

SheepDog-One's picture

LOL, total insanity, puta's! 

mick_richfield's picture

You know, I think this is exactly what Jim Willie said would happen about six months ago. 

That guy's starting to make me kinda nervous.

FunkyOldGeezer's picture

Fed running silent. Who's done all the liquidity swaps?

slewie the pi-rat's picture

i'm sorry, the corporate robots are not releasing any info except as required by "law"

you see, this REALLY helps them ream us!  no matter what we try, they can just fade it and "paint" prices to win, overall

and then they can "monetize" their winnings [their losses to, b/c we are fuking DUMB!!!]

as in any casino, the winners are ecstatic about how wunnerful they are doing, and the losers tend to minimize their losses, publicly, so people won't think they are styoooopid!

FunkyOldGeezer's picture

When is the Amerika coming on-stream. Bills and coins already made, so I've read.

EZYJET PILOT's picture

Makes me sick. Tyler am I right in thinking that the 2 trillion increase in the last few months is the Central bank swap plan announed in Nov 11 plus the recent LTRO? It'd be nice to see an article that outlines exactly what the 2 trillion is comprissed of..

e92335i08's picture

Greece Defaults 10:03

Bansters-in-my- feces's picture

Incase any Central Bankers and/or their advocates are reading ZeroHedge.I stopped by to say "fuck you's " you pieces of shit.

See ya in hell.....

slewie the pi-rat's picture

dougNoland gives the a great weekly update on this "stuff"

here is a paste from a week ago today [A New Bull Market?]:

Federal Reserve Credit expanded $4.6bn to $2.918 TN.  Fed Credit was up $426bn from a year ago, or 17.1%.  Elsewhere, Fed Foreign Holdings of Treasury, Agency Debt this past week (ended 2/15) surged $26.3bn to $3.447 TN. "Custody holdings" were up $63.5bn year-over-year, or 1.9%.

Global central bank "international reserve assets" (excluding gold) - as tallied by Bloomberg – were up $958bn y-o-y, or 10.3% to $10.250 TN.  Over two years, reserves were $2.435 TN higher, for 31% growth.

M2 (narrow) "money" supply declined $7.4bn to $9.772 TN.  "Narrow money" expanded 10.0% from a year ago.  For the week, Currency increased $1.3bn.  Demand and Checkable Deposits declined $1.5bn, and Savings Deposits slipped $0.8bn.  Small Denominated Deposits declined $2.4bn.  Retail Money Funds fell $4.0bn.    

yogibear's picture

Time for commodities, Food and oil to break their highs and continue on. Infitite pretend money chasing finite resoruces spells a huge spike in prices.

Huge stagflation in the cards. These Keynesians are not sticking to their rules. For decades they had their stimulus pedal mashed to the floor without paying down deficits. More and more deficits until it's reset time.