Monday, January 26, 2009
Fed's balance sheet is shrinking
In the latest release of its weekly statement (Jan 22) the Fed's balance sheet is down about $200 billion ($2.1 trillion) from the peak back on January 2 ($2.3 trillion). About $130 billion of that reduction came from the Fed's foreign currency position, which is marked to the market. Are those currency losses? Where are the journalists, lawmakers, economists and other screaming about this? They only scream about help to American businesses and households, I guess. When it comes to losses on loans to foreign entities, nobody says anything.