Central Banks investing in the stock market

Posted: June 17, 2014 in Uncategorized

It is years that often I tell you that this market is rigged by the Central Banks. And you could always have dismissed my theory as another conspire theory.

The idea is that since the normal ways (increasing the money available to the banks so they lend it out) do not work, try to make the consumer feel better so it is the consumer that kick starts the economy.

Now, as the Financial Times reports, you can see that is all real:

 

The FT reports a cluster of central banking investors has become major players on world equity markets.” The report, to be published this week by the Official Monetary and Financial Institutions Forum (OMFIF), confirms $29.1tn in market investments, held by 400 public sector institutions in 162 countries, which “could potentially contribute to overheated asset prices.” China’s State Administration of Foreign Exchange has become “the world’s largest public sector holder of equities”, according to officials, and we suspect the Fed is close behind (courtesy of more levered positions at Citadel), as the world’s banks try to diversify themselves and “counters the monopoly power of the dollar.”

 

And by the way, always the Financial Times, says that the FED is thinking to impose exit fees on Corporate Bond Funds – they are fuelling this rally so much that they are scared there could be a mass exodus from Bond Funds. Also, your money will have to go into shares.

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