by Pam Martens and Russ Martens at Wall Street on Parade
Last Friday, the Federal Reserve published its Financial Stability Report, which takes a detailed look at U.S. financial stability through the second quarter of this year. Although the Fed does its best to put a rosy glow on the outlook, it’s not a pretty picture.
We found the most disturbing sentence in the report to be the following:
“Overall, estimated runnable money-like financial liabilities increased 3.4 percent to $20.3 trillion (75 percent of nominal GDP) over the past year.”
Given that a handful of banks this past spring, with combined liabilities of less than $1 trillion, caused a full blown banking panic and bank runs, the Fed’s figure of $20.3 trillion of “runnable” money is not a comforting thought. The Fed elaborates as follows:…
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