Central Bank Money Printing/Asset Purchases

I don’t trust Goldman Sachs, but they’ve produced a very nice graph of central bank asset purchases, which was achieved by electronic “money printing”.


The graph shows that between 2006 and 2021, central bank balance sheets increased from $5 trillion to more that $50 trillion. A graph brings a few questions to mind.

  1. What would global GDP be in the absences of the financial injections? (much lower)
  2. What would would the interest rates be in the absence of the financial injections? (much higher)
  3. What would equity and other asset valuations be in the absence of the financial injections? (much lower)
  4. How long can central banks continue to debase currencies before faith in the system fails? (I don’t know!)
  5. Do authorities understand the risks and if so is this why they are in a hurry to adopt digital currencies? (yes, I think so.)
  6. Is the push for COVID-19 induced “digital health passports” connected to managing the challenges associated with maintaining power/control, the problems in the global financial system, and the transition to digital currencies? (I believe so.)

Published by markskidmore

Mark Skidmore is Professor of Economics at Michigan State University where he holds the Morris Chair in State and Local Government Finance and Policy. His research focuses on topics in public finance, regional economics, and the economics of natural disasters. Mark created the Lighthouse Economics website and blog to share economic research and information relevant for navigating tumultuous times.

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