ECB and BOJ Balance Sheet – Other Beasts

I have written about the FRB’s monstrous balance sheet, which quite frankly has ballooned by about 80% since February 2020. The reality is that both the European Central Bank (ECB) and the Bank of Japan (BOJ) has not lagged far behind. As noted in the graphs below, the ECB’s and BOJ’s central bank assets have increased 50% and 22% respectively since February 2020. These staggering figures all combined have led to an overabundance of liquidity in world markets – which is no surprised why we have seen a sharp upswing in world equity prices since 2Q2020. Despite the market sell-off today (2/25/2021), liquidity is still ample to buoy the current markets run. But my previous warnings still apply: do not be caught off guard during the coming storm.

ECB

BOJ