The QE was to the most part sterilised by the financial institutions (presumably those who sold the toxic assets to the federal reserve). By sterilised, I mean the money created was held, to the most part, from entering normal circulation. Thereby limiting inflation.
I believe that by subtracting out the excess reserve figure from the federal reserve balance sheet, we get a figure which perhaps shows more clearly the amount of dollars entering circulation as a result of the Federal Reserve actions. See the following graphs for more information.
EXCSRESNS Excess Reserves not seasonally adjusted. One of these series have been discontinued, but there is a continuing series, just a little harder to find at the St Louis fed.
At the time of this analysis, it is early 2015, so I will take data points:
|Date||AMBNS - EXCRESNS||Compund rate of change per year|
Conclusion: The US federal reserve has been putting new USD into circulation at a significantly faster rate after the 2008 financial crisis than before. It would be reasonable to expect singnificant inflation. This has perhaps shown up in the stock market, and has been suggested in food prices, which may perhaps come down a little since oil prices have dropped.
Email nick at nickhill dot co dot uk.
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