The following graph represents the composition of the Fed balance sheet as of April 2011:
The graph was shown in an article on how the Fed is secretly bailing out commercial real estate. The graph is a bit difficult to read, but it is not difficult to see the $2.0 trillion added to its balance sheet. It is also easy to see what the conventional Fed balance sheet looked like before the crisis. One should note that the Fed was formed in 1913 and up until 2008 had a balance sheet that did not exceed $800 billion in assets. Since that time, $2.0 trillion of mostly toxic assets have been added.
My recent post entitled Flim-Flam Economics dealt with the manner in which the Fed did covert QE. The article dealing with the bailout of commercial real estate provides examples of the covert QE.
It appears that the Fed, in attempting to bail out the banks (probably unsuccessfully) has jeopardized its own solvency.
