How America Has Financed Its Pandemic-Era Trade Deficits: Printing Money

Net issuance of repos, bank deposits, and physical currency have covered much of the gap so far.

American consumers, businesses, and governments collectively spent about $1 trillion more than they earned in income since the end of 2019. The necessary corollary is that entities outside the U.S. spent about $1 trillion more buying U.S. assets than Americans spent buying foreign assets.¹

How did we cover this gap?

While other sources played a role, the …