$21 Trillion And Rising: How Central Banks Are LBOing The World In One Stunning Chart, by Tyler Durden

Six central banks balance sheets sum to more than 40 percent of global GDP. The world has gone far beyond the point where an additional currency unit of debt pays for itself with more than one currency unit of additional GDP. From Tyler Durden at zerohedge.com:

Back in late 2016, we showed the unprecedented domination of capital markets by central banks using a chart from Citi, which had put together a fascinating slideshow asking simply “Where is the utility in marginal QE” and specifically pointing out that the longer unconventional monetary policy such as QE continues, the bigger its marginal cost, until eventually QE becomes a detriment.

A broad criticism of monetary policy, the presentation carried an amusing footnote: “This presentation does not change any of Citi’s existing, published views on the actual future path of monetary policy. It is merely intended as a contribution to the ongoing debate about the efficacy of available policy tools” –  after all, the last thing the market wanted is the realization that even banks no longer have faith in the central planners.

Incidentally, Citi’s broad critique of global QE took place when central banks owned just over $18 trillion in assets.

Fast forward to today when in its latest update of central bank holdings, Citi shows that as of this moment not only has the total increased by another $3 trillion to a grand total of $21 trillion and rising, but that the big six central banks now own over 40% of global GDP, more than double the 17% they held before the financial crisis less than a decade ago.

Which is remarkable in a world where there is still some confusion about what is behind the “global coordinated recovery”, and where there are deluded people who claim that central banks are now out of the picture.

To continue reading: $21 Trillion And Rising: How Central Banks Are LBOing The World In One Stunning Chart


One response to “$21 Trillion And Rising: How Central Banks Are LBOing The World In One Stunning Chart, by Tyler Durden

  1. Can you say hyper inflation. Sure you can. Now remember kiddies, nations that have hyperinflation undergo unique social and economic changes, like Weimar Germany, pre-Revolutionary France, Argentina, Venezuela today, and even the South during Mr. Lincoln’s War.

    You think the wealthy and powerful will suffer? Look at the names of the people who run the banking institutions of the world and ask yourself if 40 years ago their daddies were postmen or teachers.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.