Skip to main content

The Federal Reserve's balance sheet expands at a record pace

The Federal Reserve's balance sheet expands at a record pace



- The Federal Reserve's balance sheet is expanding at a rapid rate.

- In the last two months alone, the Fed has bought more assets than during the entire Great Recession

- Some argue that the Fed's actions will lead to inflation in the long run.

The Federal Reserve is buying back assets and its balance sheet is growing rapidly, especially over the past two months. Currently, the Fed buys about $41 billion in assets on a daily basis, and central banks around the world are also following in this vortex.

According to an analyst at prime xbt , the economic point of this is pretty clear: inflation is coming.

The Fed is buying in bulk

The current spike in the Fed's balance sheet hasn't slowed since March. In fact, it's only picked up speed, and the result could be an unprecedented surge of inflation. This is what analyst Mati Greenspan (@MatiGreenspan), founder of Quantum Economics, told his followers recently.


As shown below, the gray area is the most recent recession (2008). Since then, the Fed's balance sheet has returned to steady growth. And the worrying thing is, it has really spiked in the last two months.

However, despite these concerns, inflation has yet to come. The dollar is in fact stronger than ever. The real crisis, at the moment, appears to be deflation.

You May Also Be Interested In: Bitcoin Forms a "Golden Cross" Pattern When Price Hits $7,500

3. Inflation or deflation?

As BeInCrypto recently reported, the fear is that in the short term we will see a deepening deflationary spiral. Global prices fell as demand was low, businesses struggled to stay profitable. Typically the consequences of the global collapse in oil prices.

For now, most economists aren't worried about inflation. However, according to some, they should put their mind to it. The inflationary period will usually come after deflation, and it all depends on how the Fed responds to the current crisis.

BeInCrypto reached out to Mati Greenspan for his thoughts on the matter. He said that in the short term, there will be deep deflation. However, as things begin to return to normal, the Fed's actions will likely be the catalyst for serious inflationary problems.

“During the shutdown, we are in a period of low demand for commodities. But once we start moving and shopping again, the money that has already been created won't go away."

Comments

Popular posts from this blog

China Launches Blockchain-Based Service Platform for Global Trade

Six months after the launch of the beta test, China's blockchain-based service network (BSN) has officially opened to the global commercial market. China Launches Blockchain-Based Service Platform for Global Trade Government officials and heads of organizations met on April 25 in Beijing to announce the public launch of the BSN network. BSN is a global infrastructure that helps Blockchain projects design and operate Blockchain and crypto applications at a lower cost. At the same time, the network also promotes the development of smart city and digital economy. BSN was implemented by the cooperation of China Mobile, China UnionPay, and Huobi China. You may be interested: Director of BIS Innovation Hub: COVID-19 reveals the value of DLT Good start Both businesses and individual developers have expressed interest around the Blockchain-based Service Network. According to the report, more than 2000 developers have tested BSN within 6 months since the beta was announced on October 15, 20...

Director of BIS Innovation Hub: COVID-19 reveals the value of DLT

Benoît Cœuré, director of the Innovation Hub at the Bank for International Settlements, recently said that central bank digital currencies, or CBDCs, crypto, have been “highly centralized.” amid the corona pandemic. On April 17, speaking during a webinar organized by Accenture, the Bretton Woods ReReinventing Committee and the Chamber of Digital Commerce, Cœuré said that “the crisis has revealed the value of technologies that have the potential to help the industry. economic expansion of its activities”. He also revealed that the Bank for International Settlements (BIS) is looking into tokenization or crypto as a possible solution, to restart some segments of the economy during the lockdown period because of Covid-19. Corona pandemic reduces cash consumption The head of Innovation Hub highlighted the decline of cash payments during the Covid-19 pandemic, and affirmed that the current economic situation creates a lot of discussion around CBDCs: “Central bank digital currency is being di...

Compare Bitcoin investment and Bitcoin trading at Primexbt

In recent months in 2021, bitcoin has broken out in value from $5,000 to $69,000, attracting a huge wave of interest from both professional and casual traders. When participating in this volatile bitcoin trend, the first thing you need to do is decide whether to trade or invest in this cryptocurrency.The suitability of these two options depends on many factors, ranging from a willingness to take risks to a long- or short-term investment strategy. To help you make the right decision, we've listed some characteristics of both below: Bitcoin Trading on primexbt It is possible to speculate on the price without actually owning it Leverage can be applied to open a position with a very small amount of money Can trade quickly without having to wait for the exchange It can find opportunities to sell and buy BitcoinsGreater short-term profit potential, while also higher risk Invest in Bitcoin Allows you to get the most out of your purchased bitcoin ownership Must make purchases through excha...