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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hooligan2009's picture

ok, swap "the world" for the central bankers central bank the BIS and all central bankers are "BIS approved".

http://www.bloomberg.com/research/stocks/private/people.asp?privcapId=87...

whose "political consensus" are you talking about? france germany and italy to rotate away from traditional hard currency north european countries like holland and germany into debt hungry libtard socialist countries like france, italy, spain and portugal?who is next? a hugarian, pole, irish or greek? dies that give europe the moral high ground in design and implementatin of monetary policy, because there "chosen ones" are drawn from 27 countries rather than one?

to your point on US and UK governments appointing "experts" to run monetary policy.

correct, the US and the UK are not chauviistic like the 27 country EU bloc. though the US has 50 states to choose from all of whom speak english.

this does not make the US or UK central bankers any the less retarded than the ECB, BOC or BoJ. it means they have swallowed the libtard socialsim ingrained within "modern" monetary policy THEORY that has failed absymally wherever it has been applied.  they have all been captured by the groupthink to produce NOTHING OF MEASURABLE VALUE.

here's a few notes.

in the US, deputy chair Fischer was born in Zambia and holds both an Israeli and a US passport.

the UK is paying Mark Carney, a Canadian, 900,000 pounds a yea, to do "double O, triple O, fuck all blank" except to devalue the currency as much as possible, like the good looney he screwed up hilst supporting libtard socialism in canada.

http://www.cityam.com/217950/bank-england-governor-mark-carneys-earned-8...

janet yellen makes only 200,000 DOLLARS a year

http://time.com/money/3516794/janet-yellen-salary-fed-staffers/

mario draghi gets 400,000 dollars

http://www.getnetworth.com/tag/how-much-is-mario-draghi-salary/

incidentally, Wim Duisenburg was prez of the ECB from 1998 to 2003. he oversaw the launch rate of 1.199 us dollars on 1 Jan 1999 and its fall down to just 82 US cents per euro. that is is sitting at 1.12, down from a peak of 1.42 WITH NO-ONE TALKING ABOUT THE IMPACT OF THE EXCHANGE RATE ON RISING OR FALLING EMPLOYMENT, GROWTH OR INFLATION, says volumes for the irrelevance of monetary instruments in controlling inflation.

 

 

 

Mercuryquicksilver's picture

Roger Stone said it was Nixon's 2nd worst mistake. I'd say 1st.

Dutch1206's picture

Yes it was.  Basically set the entire system to go to shit eventually.  It's not a matter of if anymore, just when.

r3phl0x's picture

Don't worry, he said it was only temporary.

Arlen Williams's picture

It's been a long time (never) since we've had our 50-year Jubilee....

hedgeless_horseman's picture

 

The bankruptcy courts are open today.

Ask President Trump, General Motors, or Lehman Brothers, if you need directions.

Kprime's picture

not if you are a young citizen in the US and have been roped into your share of the Trillion + "fuckemacation" student slave market.

the fucking thieves in all levels of the US .gov have made sure of that; there is no escape, you are not part of the "free" society.  you are the new permanent under class. find a basement.

Seasmoke's picture

Nothing is REAL.

small axe's picture

central bankers are fucking thieves and need to die

bankerssuck's picture

Finally someone with a brain...

They are the scum of the earth for sure.

Xena fobe's picture

Good thing none of that trillion ended up in the hands of the poor and middle class or we would have had hyperinflation. 

Cutter's picture

Whats scary is what happens when markets fall, and those bloated CB balance sheets turn into nothing but a big hole.  The theory dictates central banks cannot fail.  We shall see.

orangegeek's picture

The way to fuck the CBs is to stop spending - on everything you can.

 

Some are broke, so it doesn't matter, they've already stopped.   LOL

 

But if those who have cash stop spending all together, these markets collapse.

 

Not even CBs can handle numbers of this size.

Snaffew's picture

but how do people live if they can't eat, wash, heat, power their homes, and pay their car loans so they can get to work?  People will never stop spending---even the street bums spend money---

NoWayJose's picture

It doesn't make sense until you realize that the Central Banks are simply bidding up and buying the assets held by their owners.

GotAFriendInBen's picture

One CB punts the printer to another who punts to another

It's no longer just the Fed shorts are fighting

Will remain irrational longer than any short will live

bankerssuck's picture

So, tell me everyone...... how hard is it to buy everything in the usa with debt attached to it?

When you can print plantation notes out of thin air,

or place digits in a computer and call it "money",

it basically costs you zero....

Thomas Jefferson's warning of the banksters fall on deaf ears in the usa.

So sorry

 

Snaffew's picture

for all we know, this could go on for another 5-10 years before the whole CB system implodes violently.  They have been doing this since 09 and are showing no signs of slowing down.

Herdee's picture

Not even Trump will be able to stop the correction when she comes. Tightening late in this business cycle isn't a sign of strength. 

Able Ape's picture

Hey, can I hypothecate my savings account of $10K in one bank to $10K in each of 10 banks?  Why the hell not?... What?  You have to be a member of a club?...

Pollygotacracker's picture

Thank God I have enough money to stay out of the stock market. What a f#cking joke. Crooked as a dogs hind leg.

geekz_rule's picture

lol.

P < P + I , derp  #HostLife [because we are all just hosts (food sources) for the global 1% inbred parasites]

like playing poker with a "banker" with their personal money creation press at their side. YOU CAN'T WIN.

but lets remember what this is about. MONOPOLY. that's all. CB's OWN the world (Think bond like Spectre)

F Hayek's loving guidance

1) deregulate global financail markets

2) deregulate global trade

3) Bankrupt (nueter) Soveriegns with fiat destruction

4) Privitaize EVERYTHING

now, the sheeple, will pay rent for EVERYTHING to the 1% Inbred Parasites. for ever. #Winning

#PlantationLife becasue regardless of your stacks, you are OWNED like a hoe in the street. a slave. to inbreds.

hooligan2009's picture

it's about time that central bankers took responsibility for their actions and started voting at company AGM's and directing economic policy at cabinet meetings of governments /s

oh wait, they already do that via the QE/NIRP/ZIRP/L(ow)IRP interest rate policies they operate to make or break bankrupt governments.

libtard socialism needs to end.

pick a marker like "no fiscal deficits until debt at 5% interest rates is less than half of federal health care spending".

20 trillion debt today times 5% = 1 trillion smackeroos. i picked 5% to reflect inflation and the probability of full US sovereign default in the next thirty years.

current federal health care spending = 500 billion (https://www.cbo.gov/topics/health-care)

level of debt for half of health care spending = 250 billion, so debt at 5% interest rates must be less than 5 trillion (5 trillion times 5% = 250 billion)

pick another marker, like child poverty, military spending, housing, EBT with an appropriate multiplier/fraction for a similar level of sustaiable debt.

point is - NO FISCAL DEFICITS

running a trade surplus is the way to achieve this. everything else is frog noises in the swamp.

jamesmmu's picture

those so called 1T assets may only worth 50B at best when market crash, things can go out of control really fast from here.

rejected's picture

Print up money in a back room, go out and buy a car.  What's the difference?

Then we adimre them. thank them for basically doing the same!

Incredible! We deserve whatever's coming.

ToSoft4Truth's picture

Central banks didn't "buy" assets.  Central banks offered 'collateralization' on assets.

 

When the system blows, Central Banks will own most everything. 

GRDguy's picture

That's exactly right.  The CBs are trading "thin-air money" for TITLE.

The old 1889 book "Great Red Dragon: Foreign Money Power In the United States"

stated right up front:

"... their goal is to own the earth in fee-simple."

Guess someone way back then was tryin' to tell us something.

Obviously, it was lost on dead fish eyes.

Vilfredo Pareto's picture

Thin air money for title to debt that rolls over in perpetuity is not a good deal.  Even if they buy only secured credit those assets can get written down that they think backs the full value.

 

I see it as the CB's and taxpayers as the ultimate bagholder, while others get the real value (the corporation that can sell debt at par due to  CB intervention when it would sell below par without that intervention for example)

CHX13's picture

For the record and some perspecitve 1 Trillion is roughly the equivalent of 25 000 metric tons of gold at current prices, or roughly one 1/7 of all gold ever mined throughout history with a bit of Contr+P in 2017. No wonder they hate the barbarous "relic"...

Goldbugger's picture

1 Trillion that's nothing like the FEDS balance sheet, my calculations shows the US will he 20 trillion in debt in approx 120 days from now.

TIPPSY KABOOOM>

Goldbugger's picture

The GREAT RESET is still coming to a bank near you, globally.

Nomad Trader's picture

Financial markets are the policy tool of govt and CBs. They will do with them whatever they want to. That includes both rallies and crashes. Fundamentals have been meaningless since 2009 when it was *certain* to everyone on the planet that stocks couldn't possibly rally. 

northern vigor's picture

Ever thought of this...when central banks buy equities, what is the difference between states nationalizing corporations? 

hooligan2009's picture

you vote for a government that nationalizes assets at a certain fixed price - whereas for a central bank - you don't get to vote on either what asset or what price.

bshirley1968's picture

Vote? LMAO! Now that's some funny shit right there!

northern vigor's picture

My apologies...I really need to be clearer when I throw out these rhetorical questions where I already know the answer.

The answer is ...there is no difference between states and CBs buying assets. It  is the death of true capitalism in both situations. It is closer to the Chinese form of communism where the state pretends they are capitalists stealing the property of individuals.

hooligan2009's picture

yep- interference in price setting by police state interests, government libtards or cliically insane central bankers has only one tupe of outcome - failure, poverty and pollution of the clear markets of free trade.

beggars belief that there have been no advances in modern political science and methods for decades.

it surely cannot be beyond the whit of people to see what a failure we currently have to come up with something new and revolutionary.

perhaps setting common sense goals for health, education and trade/fiscal deficits (SURPLUSES!!!!) would eliinate all the hot air balloons floating around the 435 + 100 + 1 (+7?) bubble heads that are accountable for nothing in particular.

CHX13's picture

If they keep up the pace, Apple will soon be a SNB/Swiss-owned company.

Honest Sam's picture

One problem:  Didn't you know that Central Banks are private corporations, just like "Toys r Us", and "Petsmart".   They aren't governments which means they can't 'nationalize' corporations.  

ahem.....

bshirley1968's picture

All of these central banks are connected through the BIS, but that's a whole other angle.

Right now the dollar is king.........but is it?  If we look at currency values, who is on top and always seems to be?  The British pound.  I know it's because they are such a manufacturing powerhouse, right?  Maybe it's because they don't have any debt?  Wrong.  Why is the pound worth what it is?

Let's consider.  I believe the Yen and Euro are just proxies of the dollar.  They are assets we are burning down before we burn down the dollar itself.  And the pound just sits there.  Consider all the "British Empire" states like Canada, Australia,  Netherlands,  etc.  Look at their currencies and how strong they are on the world market.  Consider how beneficial this is for the people in those countries.  Consider how it is cheaper for British to buy American because their currency is stronger.

London is where it all began.  It is the original central bank.  I have stated several times how I was amazed the British got to join the EU, that they were instrumental in developing, but then got to keep their own currency while everyone else gave their's up.  Now they are bailing and look how easy it is for them since their currency is still in use.  So is the dollar just a proxy of the pound?  Did the British Empire just use the US as a front to maintain a world empire?  Didn't the London banking cartel take over the US in 1913?   

A lot of people get on here and go on and on about how Tel Aviv is running everything, but didn't London start that as well?  Don't the Brits set the gold and silver market prices?

It's all connected, and somebody has an interest in "ruling" it all or else they wouldn't be working so hard to manipulate and maintain control.  Who conquered the British empire?  Maybe they just maintain the empire.....from the back room.  All the benefit........without the unwanted attention.  The US pushes their policy (and we have) and takes all the heat while the crown is admired and loved by all.

Just some of my thoughts when I see these central banks working together.

Ghordius's picture

very interesting, excellent comment, even where I do not agree

"I believe the Yen and Euro are just proxies of the dollar.  They are assets we are burning down before we burn down the dollar itself " well, a side question would be who is this "we". the answer would be: "not if we eurozoners or Japanese can prevent that"

but that's the game, yes. America burns the dollar and the rest of the world has to cope with that

the Brits were going to adopt the EUR. for that, they had to enter the ERM, which they did, but consensus today was at an overvalued price. it was not the first time for that, Churchill himself re-pegged the Pound to gold at an overvalued price, and the Pound fell off that train, between the wars

enter Soros, enter lots of billions that were never explained from where they came, and the Pound fell off the ERM

then, interestingly, the practically same forces that did just push for Brexit started a fear campaign in the UK. it featured articles like "EUR coins bear deadly viruses" and "EUR notes are unnaturally dirty". for the more discerning public, the narrative was that a FIRE economy where everybody (that counts, of course) profits from rising assets in both RE and financial form needs a national currency that devalues, while those eurozoners want "price stability" because they prefer to produce things instead of doing FIRE

"Did the British Empire just use the US as a front to maintain a world empire?" a Brit would not like that, a Frenchman would nod, a lot of others would point to a theory based on "passing the baton"

"Didn't the London banking cartel take over the US in 1913?" if you want to be a stickler, the thing started in 1907, with the banking crisis, except that they called "the Panic"

Blankfuck's picture

Part of the FED FUCKER eight plus  year rally. These fuckers started a con game they can not let decline now! Stocks, real estate if they decline the banks are fucked with another collaspe. With this con game created, everything gets expensive. Times are hard for most therefore stores are closing. When if the burger flippers at McDonalds make 100 grand each a year,just to catch up to pay high prices, then maybe the economy will be great again.

perkunas's picture

and ....Janet loving Trump will fix it? Lets face it we got Trumped.

all-priced-in's picture

What happens when they run out of stuff to buy?

 

 

hooligan2009's picture

they contribute to start-ups (like nose hair trimming companies or navel cleaning chips) via crowd funding, watch them go bust then do it again with fiat money.

or.

pay farmers for each blade of grass, or water companies for each drop of water or beach resorts for each grain of sand - simply to follow the mantra "DO NO WORK, PAY NO TAXES - PRINT MOAR MONEY"