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Quick Question:

The Fed purchased $1.7 trillion of MBS, agency debt and treasuries in QE1, which began in March 2009, and as of Dec.15 was holding $2.129 trillion on the asset side of its balance sheet.

Commercial banks are currently holding $1.053 trillion on deposit at the Federal Reserve Banks, as noted on the liability side.

So the question is, where did the other $700 billion go? The stock market? Commodity speculation? Capital markets?

Care to guess?

click to enlarge

Source: Where Did the Fed's $700 Billion Go?