In general, an abundance of dry powder is considered a bad thing. It means firms raised more capital than they can reasonably spend, which means either: (a) Limited partners are stuck in illiquid situations much longer than originally anticipated, or (b) Private equity funds recklessly try to make deals happen, thus often overpaying.

“B” didn’t happen much the last time dry powder passed the $1 trillion mark, largely because the credit markets had seized up and it wasn’t a practical option. But debt is plentiful right now — even covenant-light loans have returned — which should make PE fund investors a might worried. Around $329 billion of the dry powder is for leveraged buyout funds, and in the U.S. there are tax incentives to make things happen by year-end.

Perhaps I’m just worrying over nothing here, and the dry powder figure is just reflective of a lag between the revivals of private equity fundraising and deal-making. But in a market where everyone always complains about too much money chasing too few deals, the existence of even more money can’t be considered a net positive.

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