All the worlds central banks are printing money like never before, and this is for the first time in history. The balance sheet assets of the six major central banks have just hit a new all-time record high of $17,3 trillion. Thats up from $4,987 trillion in May 2006.
People`s Bank of China (PBOC) has the largest balance sheet with total assets of $5,0 trillion, followed by the Federal Reserve with $4,4 trillion.
The SNB is at the bottom of the chart above, but it has the largest balance sheet as a percentage of GDP, with it currently up to 88,4% of GDP vs. 20% of GDP in May 2006.
The BoJ`s balance sheet is equal to 70% of GDP vs. 25% of GDP in May 2006.
The PBOC`s balance sheet is equal to 53% of GDP vs. 56% of GDP in May 2006
The Fed`s balance sheet is equal to 25% of GDP vs 6% of GDP in May 2006
The ECB`s balance sheet is equal to 25% of GDP vs. 13% of GDP in May 2006
The BoE`s balance sheet is equal to 22% of GDP vs. 6% of GDP in May 2006
The total assets of the world`s six major central banks is equal to 36% of their combined GDP, a new all-time record high vs. Only 14% of their combined GDP in May 2006, and well above the nine median of 26%!
Trumps goal is massive growth, and IMF in January raised its economic growth forecasts to 2,3% in 2017 and 2,5% in 2018, thanks to Donald Trumps plans to cut taxes and boost infrastructure spending. The World Bank will follow IMF with similar forecasts.
Trump`s bold plan is to create 25 million new American jobs in the next decade, which means it will only take 2% annual growth of the workforce to hit that target. Data shows us that 25 million jobs have never been created in a 10 year timeframe.
A 2% growth rate over 10 year will generate 25 million jobs, which means if the economic growth rate hits 2,5% it would take about 8 years. If the growth rate goes up to 3% per year it will take about 6 years. If the rate goes higher, Trump can reach his goal during his first period as a President.
I do not agree with Trump`s immigrant policy, but there is a drawback here; If Trump want to reach his goal, he need immigrants, because the number of people who are working dropped 3,7% over the past 10 years, and some of the reasons for that is the baby boomers demographic shift.
Janet Yellen also said she consider to hike the rates because the economy is improving. The Fed want to proceed with «normalizing» monetary policy, which means they want to have room to ease in case of a future shock.
President Donald Trump can help them to solve their fiscal policy by cutting tax rates and spend more money on infrastructure. At the same time, he need to keep the lid on federal spending. Will Donald Trump succeed? Betting against him have so far been a bad decision.
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