The most recent Fed balance sheet data are summarized here. Note where the Fed was yesterday (12/29/10) relative to a year ago (12/30/09). On the asset side, "securities held outright" has increased by about $300 billion, with an increase of about $230 billion in long-maturity Treasuries, and a net increase of about $70 billion in agency securities and mortgage-backed securities. However, on the liability side, the increase in outside money has been quite small, at about $15 billion ($54 billion increase in currency, $39 billion decrease in reserves). As I remarked here, what is going on with Treasury reserve accounts at the Fed is important. During the year, the balance in the Treasury's general account dropped by $31 billion, but the Treasury also accumulated $188 billion in its "supplementary financing account." This supplementary account was created in September of 2008, and is described here. Basically, the Treasury sells T-bills, in exchange for reserves, and deposits the proceeds in this supplementary account. The balance in this account peaked at about $560 billion in November 2008, went to zero for a period late in 2009, and rose to about $200 billion in April 2010, staying constant at that level since. The Fed thinks of this as a reserve-draining operation.
Thus, once we take account of accumulation of reserve balances by the Treasury, and reductions in lending by the Fed, total outside money has increased little in the past year, in spite of a net accumulation of $300 billion in securities. Indeed, if we take the Fed seriously that it wants to "quantitatively ease," it is not doing it, since the total quantity of Federal Reserve liabilities in the hands of the private sector declined in real terms during 2010.