The current global monetary policy environment

The current global monetary policy environment. This first graph shows the size of the combined balance sheet of the US Federal Reserve, the Bank of Japan and the European Central Bank. This combined balance sheet has increased from the equivalent of US$3½ trillion in early 2007 to almost US$10 trillion today, and a further substantial rise is in prospect. Once this further increase has occurred, the combined balance sheet will be equivalent to around 35 per cent of the relevant countries' collective GDP, up from just 10 per cent prior to the crisis. The following link is to a speech delivered by Philip Lowe titled Low Inflation in a World of Monetary Stimulus. There are some excellent charts accompanied by analysis on why we are in this situation and some of the implications for Australia. (VIEW LINK)