The Fed's Balance At The End Of 2013: $4 Trillionby Tyler Durden
Sep. 14, 2012
While U.S. Media Celebrates Feminization of Boys, China Moves to Prevent 'Masculinity Crisis'
Pakistani Mom Invites Daughter to 'Wedding Reception,' Burns Her Alive For Picking Own Husband
Trump On EU: 'People Want Their Own Identity,' Don't Want Migrants 'Coming In & Destroying' Them
LOL: 'Never Trump' Signatories 'Fear They've Been Blacklisted'
DC: 'Full-Scale Panic' Setting In On Eve Of Trump Presidency
What happens next:
Putting it all together, the Fed's balance sheet will increase from just over $2.8 trillion currently, to $4 trillion on December 25, 2013. A total increase of $1.17 trillion.
This is what the Fed's balance sheet will looks like:
Another way of visualizing this is how many assets as a percentage of US GDP the Fed will hold on its books. Currently, this number is 18%. By the end of 2013, the Fed's historical flow operations will be accountable for 24% of US GDP.
Why is this important? Simple: when the time comes for the Fed to unwind its balance sheet, if ever, the reverse Flow process will be responsible for deducting at least 24% of US GDP at the time when said tightening happens. If ever.
What is scariest, is that as of this moment, all of this is priced in. Any incremental gains in the stock market will have to come from additional easing over and above what Bernanke just announced.
And finally: Fed's DV01 at December 31, 2013: ~$4 billion