An update of the daily treasury statement charts for 29/7/11. Rather eerily, the lagged charts of the total operating balance of the US Treasury vs. US equities (inverted) continue to show a spooky correlation.

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The total size of the Federal Reserve’s balance sheet declined by $7,795 million during the week ending July 27th 2011. In the post-2008 world of perennial central bank balance sheet expansions, this is rare (and probably temporary). Presumably, we’ll be seeing such contractions over the coming weeks; so we should savour them and position ourselves accordingly!

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