Why "Nothing Matters": Central Banks Have Bought A Record $1 Trillion In Assets In 2017

Tyler Durden's picture

A quick, if familiar, observation to start the day courtesy of Bank of America which in the latest overnight note from Michael Hartnett notes that central banks (ECB & BoJ) have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, "the largest CB buying on record."

As Hartnett notes, the "Liquidity Supernova is the best explanation why global stocks & bonds both annualizing double-digit gains YTD despite Trump, Le Pen, China, macro..."

And for those who have still not seen it, here is the only chart that matters.

Finally, as a reminder also from Hartnett, any time the central bank punch bowl is taken away, an unpleasant "financial event" inevitably happens.

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Ignorance is bliss's picture

I don't think it was intentional. The millennials are a byproduct of both parents forced into the workplace, poor nutrition from GMOs, too many sugars and chemicals in their diets, the Internet, and a poor education. Many Oligarchs and corporations taking their share of the pie..not a conspiracy. What I find hilarious is that those same entities restaff with their fucked up creations. Their long term survival is dependent on the same sick and fucked up kids they helped create with their greed. They reap what they sow.

Gorgeous's picture

and the steady indoctrination by the media and educational system of post-modernism, femminism, racial and gender identiy, social justice, climate con and other retarded memes make kids confused, misguided, and unproductive, to put it nicely.

pods's picture

Yep, but we as parents have the power to help them sort the wheat and the chaff.

I already have started telling my daughter about central banking, the Holyhoax, origins of war, etc. You have to ease them into it though, and make sure they understand that they will be villified if they speak about that openly. But you can educate them.

pods

Gorgeous's picture

Indeed.  Most of it sinks in.  One daughter came home from school telling of a slide show about how Global Warming will turn Earth ino Mars.  That's insanity not even found on Planet Gore.   In spite of the Parental Units, I am still suprised by the new things my own children "learn" at college.  And for the 99% who don't get a sane counterbalance....

VisionQuest's picture

Many of the Millennials enrolled in US higher education fit your dumb-down description. This marketwatch report linked at Drudge says there are millions of other Millennial-age people who are creating alternatives based on gaming. The packed arenas at the League of Legends contests indicate a growing subculture of young men and women who are not buying the party line. If fantasy-gaming pays off in million dollar prizes is it really fantasy?

http://www.marketwatch.com/story/pro-gaming-may-soon-eclipse-sports-incl...

google the images at "league of legends arena" for a real surprise

Strange Days, by The Doors: https://www.youtube.com/watch?v=70S3HywhRzs

Okienomics's picture

The global currency will be the SDR.  Watch for debt issuance in SDRs.  Countries will issue debt in SDRs, Corporations will do the same.  Local currencies (Dollar, Yen, Euro, Pound, Yuan) will remain in use for intra-national transactions.  Huge swaths of national debt in local currencies will be taken in by the IMF and swapped for SDRs.  Thus will there be a global jubilee and new wave of liquidity to spur the next phase in global economic growth.

Coming soon on the heels of the next global debt crisis.  All the pieces are in place.

What's unclear to me is whether AU/AG will be worth anything post-crisis.  It may be necessary to move rather quickly to liquidate metals in exchange for tangible property which, at the time, will be undergoing massive deflationary pressure.  

DEBT CRISIS-->DEFLATION-->SUFFER FOR A WHILE-->SOLUTION EMERGES-->NEXT GROWTH PHASE

davinci7_gis's picture

Totally agree with you Okienomics...tangible property in the form of rural/agricultural farm land property.  I think that's what you meant but I agree...AU/AG may not be worth anything when all currencies go electronic and they are based upon the SDR!

LawsofPhysics's picture

"NEXT GROWTH PHASE" -- Growth in what exactly?

Do you really think that economies can grow forever in a biosphere with finite resoures?

LMFAO!!!!!!!

debtor of last resort's picture

There won't be a next growth phase due to a lack of affordable energy. Sorry bout that.

Jack's Raging Bile Duct's picture

The big question is how unified the oligarchs of the world are. For this to work, it would need to be a coordinated effort among all major players where the current status quos are gradually shifted to a new equillibrium. Without a concerted effort, many parties risk their own total destruction.

In the SDR type situation, China completely ruins its merchantilist setup and hemorrhages industry. Their singularly most valuable asset, slave wage/labor arbitrage would be lost. Much of South America would similarly suffer, though they would recover more quickly. The USA would be crushed even worse and descend into the worst kind of Venezuelan horror over much of the country. Europe's welfare system would entirely implode. All OPEC members might do fine, but they would likely take a massive haircut on all of their UST holdings. Even still, they would not be immune as they are totally dependant on foreign goods for anything that matters.

Making this transition without incuring WWIII or Ultra-DepressionTM would be extraordinarily precarious, take generations, and require honest cooperation among a host of cloak-and-dagger elites who would ultimately need to sacrifice their individual power for this goal. I don't see that happening at all. I put all of my money squarely on perpetual global stagflation, until someone ignites WWIII.

Gorgeous's picture

Even after the catastrophe of WW2, the US wasn't ready to accept the Bancor.  Thought the USD would suffice just fine as the WRC.

It would take a global crisis now, which is probably the general idea of the CB debt explosion.

noless's picture

And those dollars buy American real estate

Scuba Steve's picture

I cash mine in for producing Land, thats it until something tangible comes along thats better than PM's/Land.

jmo.

SoilMyselfRotten's picture

That's equivalent to 5.65 trips to the Moon!

 

That's lunacy!

hedgeless_horseman's picture

 

Janet Yellen is a harsh mistress.

Zorba's idea's picture

Janet has a load in her pants...shhhh..we don't want to embarass her, she's about to sit on Trumps lap.

Sick Monkey's picture

I think Grant stated 67 miles if your using 1000 dollar bills. That would make it 67,000 miles. I will try it tonight and let you know how it goes.

Hitlery_4_Dictator's picture

The average tard in Merica can't even bend down to tire their shoes, they are so fat.  Confidence is a very very long way from being lost. 

FreeShitter's picture

What did u say while back about taking our guns and chipping us already? Tired of waiting

Ignorance is bliss's picture

Our world has natural limits. Money printing does not. We should be recycling silver, yet we do not. We should be looking for oil replacements, yet we do not. We should all have small gardens or grow towers for seasonal veggies because of the enormous amount of energy required to ship food stuffs nationally and globally, but we do not. Every country or region should be able to manufacture the necessities of community, such as building supplies, yet we import cheap sheet rock from China. We should be caring for our oceans and the sea life we depend on, but we do not. Mother Nature has limits and we are approaching those limits. The money ponzi just means we will hit them sooner. I'd argue we are approaching many of those limits even now. Money printing to humanity is like the grasshopper transforming into locust. We ravineously consume everything with no regard to natures limitations and that will be our undoing.

Giant Meteor's picture

Well fine, fine. That's all good. But as long a they can keep the plates (counterfeit) spinnng in mid air everything is going to be just swell! You'll see ...

LoL

Dr.Vannostrand's picture

Hey GM, thanks for the video last night; and to the old school ZHer whom you copied it from, name escapes me. 

Giant Meteor's picture

You are welcome. The ZH'er who contriibuted the link, jdpetti .

new game's picture

beautifully done- the grand theft of peoples equity of labor. yet majority are clueless of this theft of labor equity. moeny/savings is time/labor. when one hits 60, this all matters. no time to make up for mistakes in life. i've made a few-lol.

nothing happens because we are not yet, on average, experiencing pain like in venzuala. it be coming, as in the bleed of devaluation of currency to buy the shit we need,(inflation), not the shit we don't need,(deflation).

and then there is asset valuation keeping this debt afloat. collateral. and the debt burden with stagnent wages. corporate debt being relieved by the cb's. unleveraging leverage by cb's to extend the wealth transfer, hence the grand theft indirectly of labor/ value of money and savings and return of interest, which is ultimately labor. (there is much moar to it than this simple explanation) ie. pensions, pe valuations, cash value of stocks, interest rates of treasuries, ect. ect.. just plain theft by printers, taking first skim, and so on til the trickle is but a mist, dampness to shrinking middle class...then inevitably currency collapse, chaos. moar waor as last ditch efforts.

and this sums it up:

start by blaming psychopatic politicians, religious leaders and bankers for all this strife on planet earth.

then put the burden on individuals for not putting up a fight for their liberty. Then step back and ask why do people do this to themselves.

living beyond their means-debt.

vote for these liar fuks-same crap run by deep state entities.

and believe crap to be true...

humans are mostly just plain dumb, lacking critical thinking skills and easily led / controlled. like cattle as in chattel...

pods's picture

Most will not only not think about it, but they will become agitated or violent if you start walking them down the path towards the truth. I have seen it firsthand. It hurts too much to think about, so they refuse to. Head in the sand. Because once they understand what is going on, their whole worldview collapses. The USA home of the brave bullshit melts and they realize they have been on a human farm their whole lives, run by society for the bankers.

It's why sports take up the entire weekend. Can't have those with high testosterone sitting around during their time off work thinking about why their salary doesn't buy shit anymore. So enter cheap alcohol and sports on the tv. It's so they can escape and never have to think about anything difficult.

pods

Dancing Disraeli's picture

Everything, except gold and silver.

Ignorance is bliss's picture

Until Silver is no longer mined. Until gold is hoarded by foreigners, until oil can no longer be profitably brought to market. Money printing misallocates limited resources. Mother Nature will at some point end the ponzi. And when that day comes the people will have a quick conversation with the bankers on their way to a much different existence.

Doña K's picture

When will the rubberband break?

PM's to the moon?

J J Pettigrew's picture

I gave a broker a buy order once....

he bought for himself first.....then bought for me...

This CB game looks familiar....

Velocitor's picture

....except, apparently, gold. 

Mementoil's picture

Kinda makes you wonder how come gold is not at 10K$ yet...

davinci7_gis's picture

As long as they can print money in order to short Gold, gold will always be at the price they want it to be.

yogibear's picture

Look at the debt clock. Silver is around $800 from all the printing and debt central banks have been doing.

OverTheHedge's picture

If you buy something, and sell something, would that net out at zero? If they buy all the assets in the world, and at the same time sell the equivalent in gold (hypothicared a gazillion times), does that all round out to zero in some accountant' s ledger?

It doesn't matter if the gold doesn't exist, nor that the assets exist for that matter. As long as entries go in the ledger, all is right with the world.

At some point reality will detach from the accounting, but that won't stop them, as the numbers are in control. They might need an enforcement system to make us all believe the numbers, but that's hardly a problem.

political_proxy's picture

Tank the economy. Buy as much as possible at the perpetual fire sale.

Once  literally all is owned...sorry, did you ask a question?

 

Mountainview's picture

All a scam. What is a market capitalisation? The evaluation of a huge stock of shares based on the price of the last transaction which can be 100 shares. The Swiss Central Bank owns more Facebook shares than Zuckerberg, a double scam on the back of taxpayers.

Solio's picture

That works! Buy everything with nothing. Slick game.

Hammer823's picture

Of course they are buying.  They HAVE to.  An ever increasing stock market is required for our entire economy to work.  10% of the Federal Budget each year comes from capital gains taxes.  There's more than twice as much wealth concentrated in the stock market (30 trillion) than in home equity (14 trillion).  Every Pension, 401k, IRA, 529, and Index fund is depenedant on rising stock prices.   That's why the Central Banks keep buying.  There's really no other choice.

https://www.instagram.com/the_rigged_street_journal/

Casey Jones's picture

I wonder what do kids in business school actually study these days? Are the professors still teaching fundamentals as if they mattered?

Hammer823's picture

I have a business degree and remember studying the economic indicators in a class called "Problems in the American Economy".

Econonmic Indicators used to matter to the market before 2009.  But then they socialized it. 

Bad became Good.  Poor economIc activity was suddenly a GOOD thing bc it meant more Central Bank intervention.

The Central Banks and Instituions have created an artificial market, the value of which can be manipulated as they see fit.

The stock market is MUCH too important and influential to the eoncomy to be left to free market forces.  And it will soon become even more important once Defined Benefit Pensions are completely done away with and EVERYONE has a 401K.

Risk has been socialized.  Greenspan testified this exact sentiment in 2008.  Central Banks must rig the stock market.

 

ToSoft4Truth's picture

Rah, rah, rah!  Bush said it best;

 

"I've abandoned free market principles to save the free market system" - George W. Bush

 

https://www.youtube.com/watch?v=Tmi8cJG0BJo

Giant Meteor's picture

Or before you can save a village you must destroy it ..

We have to pass the bill before we know whats in it ..

The fundementals of our economy are strong !

Constitution? Old relic piece of paper ..

Detecting a pattern here ...

new game's picture

china redux, ie- command economy...

Bay of Pigs's picture

No. It is all Keynesian claptrap.