Posted on 04/26/2011 12:00:16 AM PDT by bruinbirdman
. . . the equivalent of 8pc of the world economy, according to new analysis by Fathom Consulting.
The figures will intensify fears that the extraordinary injection of liquidity is responsible for rising stock markets, rather than any underlying pick-up in corporate health or investor confidence.
Erik Britton, a director at Fathom, compared the development to throwing lighter fuel on a barbecue. The question is, he said, "whether the coals are lit".
The warning is the result of the extraordinary measures to prop up the financial system, which have seen central banks resort to strategies such as buying up bonds to keep the flow of money circulating.
Fathom's economists are worried that last year may have marked the high point of the global recovery. "It remains unclear how much of the equity market rally has been 'genuine', rather than simply a 'mopping up' of that extraordinary injection of liquidity," they warned. "As that stimulus is gradually withdrawn, further gains in equity markets will be harder to achieve."
To reach the £3 trillion figure, presented in its calculations as $5 trillion, Fathom measured the liquidity injections made by the world's four major central banks, by tracking how their balance sheets changed in the wake of the crisis.
The analysis of data for the US Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England shows their assets were relatively stable through 2006 up to mid-2007. They then started to climb rapidly as the global financial system began to unravel.
The central banks' assets swelled from around $4 trillion at the start of 2006 to just short of $9 trillion by the end of February this year. "The increase in the size of G4 central bank balance sheets since mid-07 has been around $5
(Excerpt) Read more at telegraph.co.uk ...
Money from nothing. I’m not a Dollar optimist.
Damn!
When this $9 Trillon bubble pops it’s gonna make one hell of a mess...
They never tell us where they got the money.
The carry trade is what has kept the Ponzi going.
The consensus among central banks is compounded inflation to solve the world debt problem.
All will decline relative to gold and oil. The period will be as long as five years.
Nobody has enough money to buy the debt they need to keep the Ponzi going. Communism and Corruption are expensive.
The only way to win is not to play.
Great more inflation.
Exactly. Not sure why everyone is so worried. Decimal points and 0's are cheap and plentiful!
“Spend all you want, we’ll make more.”
The "Dangerfield Dollar" is what I call it, cause it gets "no respect".
Some people give dollars to the homeless. I give dollars to the topless.
(thank you very much)
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