There seems to been a lot of spin put on the amounts of money pledged in the wake of the G20 summit in London. A lof the money appears to have already been committed and the actual amount of new discretionary fiscal spending is a lot less than the $5 trillion in fiscal spending that was announced.
Even the $1.1 trillion that was all over the headlines in terms of the “additional programme of support” looks overblown. Immediate contributions will only amount to $250 bn and much of this has already been pledged prior to the summit. The timing of the rest is unclear. The $250 bn in SDR‘s will simply be created from thin air, rather like printing money and most of the the $250bn in trade finance will come from the private sector.
Concerns about the actual amount of new money from the G20 meeting may lead to reassessment of the initial euphoria in markets seen last week.