Does the Fed manufacturing crises?

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A closer look on the chart of the US debt held by the Federal Reserve, could allow one to derive even more interesting conclusions.

Using chartIV, the one where the US debt held by the Fed is expressed as percentage of GDP, it would be safer to compare different time periods.

Therefore, for example, the US debt held by the Fed in the fourth quarter of 1971 was 5.88% of GDP, while the corresponding figure drops continuously (with only negligible rises between) at its lowest point after 10 years, 3.79% of GDP in the second quarter of 1981. The decline over this 10-year period is 35.5%.

From this point until 2007 the line goes quite smooth with ups and downs. In the first quarter of 2007, just before the burst of the big financial crisis, the US debt held by the Fed was 5.48% of GDP. Only one year later and in the midst of the crisis storm, in the third quarter of 2008, this figure drops dramatically to 3,21% of GDP. The decline over just one year period is 41.4% (!).

From this point up today, there is an unprecedented rise of the US debt held by the FED. Specifically: In the first quarter of 2014, this figure is skyrocketing at 15,34% of GDP, which means a rise of 377,88% in six years!

This chart not only shows the role of the Fed in the latest big financial crisis but also that the Fed has taken full control of the US state through an unprecedented debt share.

Read also:

US debt held by the Fed: Just another chart

Federal Reserve is able to contribute significantly to the expansion of crisis since the US government appears to be increasingly dependent on Fed's quantitative easing policies.

http://failedevolution.blogspot.gr/2014/02/when-system-threatens-with-new-crisis.html

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