For the first time in history, both the ECB and BoJ balance sheets have grown larger than the Fed's.

The BoJ’s balance sheet topped the JPY500tn (USD4.48tn) mark at the end of May, central bank data showed today.

20170601 CBs 0 - BoJ, ECB Balance Sheets Exceed The Fed's For First Time Ever - What Happens Next?

 

Furthermore, the latest data also shows the pace of the increase in BoJ's holdings has slowed considerably in recent months.

At the end of May, the central bank’s holding was up JPY70.7tn from a year earlier, more than 10% below the BoJ's official guideline of an annual increase of JPY80tn .

However, its the ECB and BOY buying that is keeping the world's equity markets alive since The Fed ended QE3…

20170601 CBs2 0 - BoJ, ECB Balance Sheets Exceed The Fed's For First Time Ever - What Happens Next?

So what happens next?

The Fed has attempted to make the market believe that it will run down the balance sheet as it matures… Which will be a lumpy tightening in monetary conditions…

20170406 fedbs 0 - BoJ, ECB Balance Sheets Exceed The Fed's For First Time Ever - What Happens Next?

 

And unless someone steps up… the global central bank balance sheet will collapse… and that will not end well for global equity markets…

20170601 CBs1 0 - BoJ, ECB Balance Sheets Exceed The Fed's For First Time Ever - What Happens Next?

 

Is this what happens next?

or will the world lose faith in its reserve currency before?

20170601 CBs - BoJ, ECB Balance Sheets Exceed The Fed's For First Time Ever - What Happens Next?

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