We just hit a new record high.
No, I’m not talking about the stock market. I’m talking about Central Bank balance sheets. While everyone is talking about the Federal Reserve’s proposal to shrink its balance sheet, globally other banks have been cranking up the printing presses.
As a result of this, the G-4 Central Banks balance sheets (Japan, the US, the ECB, and the UK) are closing in on an astounding $20 trillion.
H/T Dimit.
In a front page article, the WSJ takes aim at the "biggest market puzzle" of our times: the bizarre disconnect between growth and inflation, where on one hand government reports of strong, coordinated, global economic growth and tumbling unemployment (at least in the US and Japan) are offset by the complete lack of concurrent reflation. Some examples:
From RanSquawk
US survey-based PMIs have surged to their highest levels since April 2011 in the last few months, seemingly signifying to all that the US economy is chugging along nicely and escape-velocity-driven nirvana is right around the corner. There's just one thing... the bond market is calling bullshit!
The last time this kind of decoupling happened was in 2014... and that did not end well for PMIs and the economy, which slumped to catch down to the leading indications of bonds.
The head of Germany’s largest commercial bank warned of the fallout from cheap money, cautioning against using the strong euro as a justification for printing more.
Bloomberg reports that the Deutsche Bank Chief Executive Officer John Cryan called for an end to the era of cheap money in Europe, saying that the prolonged period of rock-bottom interest rates is starting to inflate asset bubbles and putting the bank at a disadvantage to U.S. rivals.