The Financial Times did a story over the weekend entitled “Central banks shift into equities”. Zero Hedge put this up Monday morning in response. The Official Monetary and Institutional Forum now says that central banks have invested $29.1 trillion into the global equity markets. Before going in to this, now we have a better understanding of how or “why” stock markets are “up”. We wondered how the markets were going up because everyone, EVERYONE so far this year has been reported to be a seller. We wondered where the money was coming from to propel prices higher is everyone was selling, now we know.
I will give you a little perspective on this $29 trillion dollar figure because big numbers are thrown around like penny candy these days and we have become numbed (dumbed) down by such huge numbers. My point is this, there is no longer any shock value to any number no matter how large it is.
OK, in perspective, the value of all stock markets on the planet added together are about $62 trillion, now it is revealed that $29 trillion or so has come from the world’s central banks. How did this happen? Do central banks have an extra $29 trillion to throw around? The answer of course is no they do not… unless they just print it up and presto, there it is ready and able for whatever folly they choose. For a little more perspective, the Federal Reserve supposedly has a total balance sheet of some $4.5 trillion or about 15% of this $29 trillion (I dropped the “.1” because it’s only $100 billion). But, this $4.5 trillion is all accounted for as being invested in Treasuries, agencies and some “junkier stuff.” Please don’t tell me that the world’s central banks are doing something that the Fed is not… or worse, the Fed is doing something that they are not admitting or accounting for!
Do you understand what this really means? The Fed (central banks) own nearly 50% of all stocks. This means that yes, stocks are REALLY manipulated and the tin foil hat crew was right again. It means that central banks can keep on creating fake money and putting that money into stocks to create fake(r) values… or …they can tank all of the stock markets worldwide at will with the press of a single button that has the word “sell” on it.
Going even further down the rabbit hole, this means that central banks own nearly half of the equity in all publicly held businesses. It means that by simply printing money, they have “privatized” the world! Of course, there is no telling as to when exactly this scheme started but let’s assume that sometime late in 2008 or early ’09 would be a good guess. The markets needed support AND it was a good entry level. Maybe this was something that “just happened” and then morphed into its current size? Maybe it wasn’t on purpose? I doubt this is the case as everything is orchestrated today, as the CIA is well known for saying, “there are no coincidences.” Who will the central banks sell to if the want out? Ahh, but why would they want out when they hold almost a majority position of the entire world.
So, we have wondered how the stock markets have done what they have done and we wondered how in the U.S. the markets have done well while the Fed has tapered their QE by $1/2 trillion annualized. Now we know, $500 billion is a puissant number that has been camouflaged by other, massive buying. Gold investors have also “wondered” how gold could go down in price while physical demand has far outstripped the actual supply. “We” have told you how for a long time now, all the while being called tin foil hat wearing conspiracy freaks. We told you that at least 100 ounces of paper gold were being created to divert capital away from the real thing. We told you that these paper ounces were being used to dilute the real thing and hide what was actually happening. Do you believe us now?
Now that it turns out that an extra $29 trillion has been printed and put to work you must ask yourself several questions. First, if it was so easy to create all of this money (in the dark) and it is so plentiful, what is the money itself worth? What is it REALLY worth? Also, if the markets are where they are because of unnatural buying, where would they be trading on their own? How much lower? If gold is priced where it is today because there are 99 fakes out there for every real ounce then what is a real ounce worth if it is actually 99 times more rare? An even better question is this, if central banks were the sellers of real tangible gold for so many years and the conspiracy nuts are correct (as usual it seems lately) and the coffers are low, THEN what is an ounce worth?
Let me ask this question in a slightly different manner. If the West’s central banks have very little gold yet retain the ability to print money and suddenly decide that they would like to stack some of the “lost” gold, what would that do to the price? Or even differently, if money supply approaches infinity and gold reserves approach zero… then what price? Is the answer not infinity?
I hope that this revelation sinks in mentally for you. If not, please reread this because this is what it’s all about. You have been beaten over the head for at least 2 years to either sell your gold (and silver) or at least don’t buy it. It has been a psychological operation aimed directly at your finances through your emotions. Hopefully it hasn’t worked. If it has worked, then it is your job to un-work it. Stand strong, buy more or buy for the first time. We now know that we are (and were) 100% correct, nothing should get between you and your insurance policy!
Bill Holter for Miles Franklyn