Usually, the Ministry of Finance will sell some short-term treasury bonds guaranteed by the US government to American investors who have idle funds and seek to preserve their value. Later, the money sold was used for the new rescue plan and stimulus bill, which solved the most basic financial needs of hundreds of millions of people.
Now, with the yield of national debt falling to almost unprofitable level, investors who have idle funds are more willing to hold their money in their hands, which aggravates the shortage of dollars, and the Ministry of Finance cannot raise enough funds to make up for the budget demand, so the Fed can only "make money" to avoid social contradictions and further deterioration of the economic situation.
But this time, the "financing scale" of the US Treasury and the expansion speed of its balance sheet really make people wonder how bad the economy has been.
According to the report of Zero Hedge, in the past four days, the U.S. Treasury has continued to issue a large number of bonds, and the cash balance of the U.S. Treasury has just reached $501500 million, a record high. In addition, as the bail-out needs of hundreds of billions of small and medium-sized enterprises and large enterprises continue to impact the US economy, the US Treasury will release as much as $2 trillion to the whole economy in the next few weeks.
At the same time, according to the latest H.4. 1 report (every Thursday, the Federal Reserve will issue a weekly report, namely H.4. 1 report, including the summary report of assets and liabilities of federal banks in 12 area):
As of April 1 day, the balance sheet of the Federal Reserve reached a record 5.8 1 1 trillion dollars, an increase of 5.57 trillion dollars in just one week.
Together with the $88.5 billion TSY Treasury futures and MBS securities purchased by the Fed on Thursday, the size of the Fed's balance sheet reached an unprecedented $5.9 1 trillion as of Thursday's close.
If you add the $90 billion you will buy on Friday, the Fed's balance sheet will expand to about $6 trillion at the close of Friday.
This data shows that in the past three weeks alone, the Fed's balance sheet has increased by $65,438 +0.6 trillion, equivalent to 7.5% of US GDP, and the growth rate is five times that of QE3. According to the former staff of the Federal Reserve Bank of new york, the balance sheet of the Federal Reserve will double to $9 trillion by the end of this year.
So, do you think this "printing speed" is normal Is this "Qian Chao" stimulus reasonable and effective?