3 ms·
I've been thinking about the same, but not sure sure if numbers really match. Just checked some figures for fun: Fed balance sheet has gone $6 trillion since 2
by jpalomaki 6y ago
I've been thinking about the same, but not sure sure if numbers really match. Just checked some figures for fun:
Fed balance sheet has gone $6 trillion since 2007. ECB [1] bit less than €3 trillion.
US stock market cap is $36 trillion [2], up $17 trillion since 2007.
[1] https://www.ecb.europa.eu/pub/annual/balance https://www.ecb.europa.eu/pub/annual/balance
/html/index.en.html
[2] https://siblisresearch.com/data/us-stock-market-value/ https://siblisresearch.com/data/us-stock-market-value/
- cm2187 6y agoI don’t know if you can do that. This is assuming an inflationary effect alone. But when there is too much cash around, when you have lots of buyers chasing a small number of assets, the price of these assets can increase in a completely irrational way.
- cat199 6y agothis is at least partly due to the money multiplier effect - a fed $1 isn't just a $1 after it's been distributed/reloaned/etc through the system: https://en.wikipedia.org/wiki/Money_multiplier https://en.wikipedia.org/wiki/Money_multiplier so you have fed $$ going into banks, which increases their ability to generate loans of future $$ > fed $$, which is then reinvested somehow