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In recent years the Federal Reserve has hardly been known for its track record and credibility. Yet a few weeks ago chairman Jerome Powell slipped in a real whopper that was downright stunning, even for the Fed.

It turns out that apparently when the Fed has been talking about normalizing its balance sheet, it has a different definition of “normal” than most other participants in the market. Because while the quantitative easing programs were sold as temporary when launched almost a decade ago, apparently that’s no longer the case.

Last month during a congressional testimony, Powell gave an answer to one of the questions that at first I almost couldn’t believe. Consider the following exchange:

Chairman Jeb Hensarling: With respect to normalization I think you had said publicly that you expect the new normal with respect to the size of the balance sheet to be roughly $2.5-3 trillion and get there over 3-4 years. Do I understand that correctly Mr. Chairman? 

Fed Chairman Powell: Yes

Huh?

When exactly did that become the plan?

And while Hensarling implies that this was mentioned previously, I have yet to find anyone else who’s been aware of this new definition of normal.

Perhaps it ultimately doesn’t matter whether Powell mentioned it before or not, but rather that it has apparently now become the plan. And when you consider that the Fed’s balance sheet was slightly under $900 billion before the first quantitative easing program was launched, and now we are looking at a baseline of $2.5-3 trillion, it’s as if the Fed has essentially just launched a $2 trillion stealth QE package. Which has seemingly not been priced in or even noticed by the markets.

Of course that’s hardly surprising given that we’re talking about an economy that has $21 trillion simply vanish without anyone outside of the alternative media noticing.

Keep in mind that Powell also said that even reducing the balance sheet down to the $2.5-3 trillion range will take 3 to 4 years. Which in reality means it’s incredibly unlikely to happen.

Because that would imply that the Fed is going to sell off almost $2 trillion worth of assets that not even the banks wouldn’t touch when they went bad, all at the same time that short-term rates are rising and foreign creditors appear to be leaving the auction. This is of course factoring in that the stock market has already started getting pummeled when rates are nearing even 3%. So with all due respect to Chairman Powell, especially given the Fed’s past track record, even getting to the range he suggests seems like a long shot at best

It’s interesting to consider that in August of 2008 silver was trading around $16. Since then the Federal Reserve’s balance sheet has gone from under $900 billion to over $4 trillion where it sits today. Now Chairman Powell is confirming that at least 2 trillion of those dollars are never coming back out.

Yet despite how most of the other asset markets have doubled or tripled since 2009, silver still sits at $16. Barely above what it costs to get the metal out of the ground. Which sure makes it seem like a better investment than the stock market given everything that’s going on.

As wild as Powell’s proclamation is, perhaps the only thing more stunning is how developments like these have become so commonplace that few even notice. Yet for anyone who was still unclear about the Fed’s true intentions, this leopard has not changed its spots. And being prepared for the eventual fallout remains more important than ever.