Observation made by Philip Lowe, RBA Deputy Governor:
Since mid 2008, four of the world’s major central banks – the Federal Reserve, the ECB, the Bank of Japan and the Bank of England – have all expanded their balance sheets very significantly, and further increases have been announced in a couple of cases. In total, the assets of these four central banks have already increased by the equivalent of around $US5 trillion, or around 15 per cent of the combined GDP of the relevant economies. We have not seen this type of planned simultaneous very large expansion of central bank balance sheets before. So in that sense, it is very unusual, and its implications are not yet fully understood……
I understand that it is his job to make these speeches , but I think anything he said ,could not have been written by any one with a BA in economics. Wouldn’t be nice if just one of these expert’s actually started talking about solutions instead ” it is not understood the effect of pumping 5 trillion into the advanced”. How about asking why they have to do that.