Before the 2008 global financial crisis, the Federal Reserve's balance sheet contained only about $20 billion in bank reserves despite the banking system functioning normally, demonstrating that the supply of central bank money was demand-determined, not supply-determined; people who wanted physical dollars could get them at a price
factualpending
Speaker
Peter StellaEvidence Quote
“before the balance sheet expansion so if we take the fed's balance sheet in 2008 the amount of currency and circulation was about 800 billion dollars maybe the amount the amount of of reserves Bank Reserves people probably have trouble believing this but it was 20 billion dollars”
Source
Debt Death Spirals, Fed's Losses, & Fiscal Theory Of Price Level | Peter Stella & Joseph Wang— Forward GuidanceCreated: 8/10/2026, 10:58:24 PM
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