It is hard to believe but as recently as 2009 the entire balance sheet of the Federal Reserve was less than $1 trillion. Today it is just under $3 trillion, and the Fed is buying $85 billion of Treasury and mortgage-backed securities a month, so if it maintains purchases at that rate, the Fed balance sheet will grow by more than $1 trillion in 2013 alone. The Wilshire 5000 index, the broadest measure of U.S. stock market performance, has risen from 8,000 in 2009 to almost 16,000 today, proving once again there is a high correlation between monetary policy and stock market performance. The Fed hopes that the money it pours into the economy through bond purchases will stimulate growth and create jobs. That doesn’t seem to be the way the world works, however. A significant portion of the money would appear to flow into financial assets. You could argue, though, that the Fed’s objective is at least partially being fulfilled because the Fed balance sheet has tripled while the stock market has only doubled in the last four years, but all this monetary expansion has not gotten the United States on a strong growth path.