Central Bank Balance Sheets: China vs USA

The Central Bank of China has pumped billions of dollars into the economy in the past few years thru the various stimulus programs. As a result its balance sheet has ballooned to over $5 Trillion now making it the largest in the world. This figure is even bigger than total assets of the Federal Reserve. A Fidelity report noted that the Central Bank of China balance sheet has grown more quickly in the past decade than that of the Federal Reserve’s.

Click to enlarge

Central bank Balance Sheet-China vs USA

Source: What a China selloff may mean for U.S. investors, Fidelity

One of the factors behind the soaring US stock prices in the past few years is the multiple QE programs implemented by the Federal Reserve. The chart below shows the relationship between the QE-3 in 2014 and the S&P 500:

Fed Balance Sheet vs SP500

Source: This chart shows the Fed’s balance sheet is still fueling stocks, MarketWatch, Jan 9, 2015

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