4 ms·

See the charts for yourself: https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL In the aftermath of the 2008 financial crisis, t

See the charts for yourself: https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL In the aftermath of the 2008 financial crisis, the Fed managed to unload a mere $800B (balance sheet went from $4.5T to $3.7T) in the longest bull run in history. Now that it's an order of magnitude bigger, you can draw the logical conclusion yourself.

rayuela 6y ago
Love it when people cite FRED. Top quality data source and one of the best litmus tests for the credibility of someone's claims on economic matters. This guy knows what he's talking bout. Good job!
jdipasq 6y ago
Actually, I can't draw the logical conclusion myself. What is it?
- Saaster 6y ago
  The Fed won't be unloading those assets in your or anyone's lifetime.
  - jdipasq 6y ago
    Ok, thank you. I found a page as well on the "so what" of that. http://www.crfb.org/blogs/cbo-consequences-growing-national-debt http://www.crfb.org/blogs/cbo-consequences-growing-national-... . It would be interesting to pontificate about how much USD the Fed can print before it does have these bad impacts. Currently it seems we're in a deflationary period bc the velocity of money has gone down so much and people are holding cash. Will be interesting to see how much inflation there is down the line after the $500B extra they're printing now.
omgwtfbyobbq 6y ago
It'll take a while to unwind, no doubt about that. The Fed currently holds ~$5.8 trillion, but it's long term holdings are about ~$1 trillion in current dollars, so it's holding an addition ~$4.8 trillion above what it normally has since the early 2000s. In October of 2014, it held ~$3.7 trillion, or ~$2.7 trillion above what it normally holds, so the recent increase to $4.8 trillion above baseline isn't quite an order of (base 2) magnitude increase. Having said all that, the net worth of households and non-profits in the US is about ~$118 trillion. https://fred.stlouisfed.org/series/TNWBSHNO https://fred.stlouisfed.org/series/TNWBSHNO

rayuela 6y ago

Love it when people cite FRED. Top quality data source and one of the best litmus tests for the credibility of someone's claims on economic matters. This guy knows what he's talking bout. Good job!

jdipasq 6y ago

Actually, I can't draw the logical conclusion myself. What is it?

Saaster 6y ago
The Fed won't be unloading those assets in your or anyone's lifetime.
- jdipasq 6y ago
  Ok, thank you. I found a page as well on the "so what" of that. http://www.crfb.org/blogs/cbo-consequences-growing-national-debt http://www.crfb.org/blogs/cbo-consequences-growing-national-... . It would be interesting to pontificate about how much USD the Fed can print before it does have these bad impacts. Currently it seems we're in a deflationary period bc the velocity of money has gone down so much and people are holding cash. Will be interesting to see how much inflation there is down the line after the $500B extra they're printing now.

omgwtfbyobbq 6y ago

It'll take a while to unwind, no doubt about that. The Fed currently holds ~$5.8 trillion, but it's long term holdings are about ~$1 trillion in current dollars, so it's holding an addition ~$4.8 trillion above what it normally has since the early 2000s. In October of 2014, it held ~$3.7 trillion, or ~$2.7 trillion above what it normally holds, so the recent increase to $4.8 trillion above baseline isn't quite an order of (base 2) magnitude increase. Having said all that, the net worth of households and non-profits in the US is about ~$118 trillion. https://fred.stlouisfed.org/series/TNWBSHNO https://fred.stlouisfed.org/series/TNWBSHNO