Why “Nothing Matters”: Central Banks Bought A Record $1 Trillion In Assets In 2017

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Zero Hedge: 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…” more …

Opinion: The liquidity supernova is also the best explanation for the 3rd Horseman of the Apocalypse (Revelation 6:5-6).

The global economy crashed in 2008 opening the door to a Democrat by the name of Barack Obama to win the presidency and sweep Congress. At the same time, Ben Bernanke was the chairman of the Federal Reserve.

Obama appointed Timothy Geithner as Treasury Secretary and between those three men and a progressive-led Congress, Quantitative Easing was employed for the first time in history.

QE1 (Dec. 2008-2010): Money was created so that the Fed could purchase debt from its member banks. The debt was mortgage-backed securities, consumer loans, Treasury bills, bonds, and notes. The gigantic purchases forced interest rates down, cratering CD and bond rates, and forcing money into risk (equity) investments.

QE1 didn’t stimulate the economy, but it did give Obama the opportunity to say that the economy was healing because of his policies.

In 2011, the Fed began QE2; more money was created for the banks to buy stocks and bonds. The economy remained weak, but stock and bond markets continued up and Barack said it was good.

QE3 began in 2012. By then the stock and bond markets were soaring and Barack Obama took credit for saving the United States from a depression.

Oh, by the way, the US Fed was not alone. The European Central Bank (ECB) and the Bank of Japan (BOJ) were doing the exact same thing forcing global interest rates to zero and stock markets much higher making the rich richer and the gap between rich and middle class greater.

The world looked the other way as Godless men ignored sound biblical principles and built a mountain of debt that mortgaged their children’s future.

And it continues today:

And all the politicians said it was good.

Revelation 6:5-6 depicts hyperinflation, a devastating economic condition that will force a man/woman to work a full day to buy food for 1 day, while the rich (oil and wine) continue on in luxury for 3.5 years.

When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand. And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.”

2 COMMENTS

  1. Markets also go up because of optimism for the future even if current fundamentals stink. So if markets are artificially propped up and nailed to a track of never ending stimulus, how long will it be before investors collectively hit the sell button for buying an “ex-security” or as they say across the pond, an “ex-parrot?”

    https://youtu.be/qE-uKBT5RAI

    History needs to record who brought us this future nightmare. And Margaret Thatcher has the answer:

    https://youtu.be/DQ6TgaPJcR0

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