Will the 2013 Fed be Any Smarter than the 2007 Fed?

Interestingly, the asset side of the Federal Reserve’s balance sheet reached the $3 trillion last week on the day before the release of the 2007 FOMC meeting transcripts that showed a central bank largely unaware that a recession was about to begin in December and of the impending doom of 2008.


The Fed's $3 Trillion Balance Sheet


One can only imagine what conditions will be like in another half-decade or so when transcripts for the 2012 and 2013 meetings will be released and the world learns of the internal debated over a massive balance sheet expansion known as QE3/QE4. My guess is that Fed officials will be seen as woefully underestimating the impact that their balance sheet expansions would have.

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