Topic: Fed Considers Buying Stocks - page 2. (Read 2287 times)

so why do they keep on purchasing huge assets and equities ,what is the core purpose,what ever it is it belong to the nation since they are purchasing it with tax payers money

That's actually really interesting, I didn't know that information was available.

I would be interested to know your (OGNasty) or anyone elses opinion on the Fed buying stock.
Is this a necessary diversification of investments, a desperate attempt at stabilization, or something else?

That is right. That means the bitcoin price will rise again and again against the fiat or the stock markets.

This would do basically next to nothing to help the economy, and would likely just be a net negative over the longer term. If the fed starts to buy stocks they're doing so to keep the stock market from collapsing, meaning that the economy is bad and it likely will remain bad until it finally gets to cycle through. This also artificially adds even more money to the economy, however it is less detrimental than direct monetary inflation (hypothetically).

Well, Bitcoin can't be printed, that's the thing. Dollars, and stock, can be. Bitcoin has to be mined, and has a hard limit.

That SOMA holding looks like a bond portfolio.  More than 95% of the net earnings from the holding is interest...

The Swiss National Bank has purchased US equities.  I don't think the Fed has, yet.

In terms of 'helping' the economy, the elites really have one trick: issue and prop up paper assets.

The problem with doing more and more of this is that the economy will become increasingly centrally planned rather than market-based.

Even if there is no political or market rebellion, or market crashes due to badly managed fragility, this would eventually (if allowed to run too long) create a neo-feudal society.

Considers buying stocks?  You realize even in their unaudited published numbers they claim to have purchased more than 4 trillion in equities...

https://www.federalreserve.gov/monetarypolicy/bsd-federal-reserve-banks-financial-information-201608.htm

Many believe the real number is >20 trillion dollars...

Never would imagine this to be a bad idea, but the reality of all this would surely spark curiosity on the effectiveness of this whole scenario.

In all honesty there tends to be success to pull around the economy, although currently the US is trying to compete with other global markets to withstand the participation worldwide.

At least they're trying, like with all American politics let's hope this works.

They are buying the corporate bonds. But if they buy the stocks, that will big problems in the sotck market.

Hey Bob! There is a bubble. Time to call bullshit. -On what? On every fucking thing.

Abandon ship!

Yes it is crazy!
But it will happen,one way or the other!
The ECB is also takling about that option! I mean they are already buying corporate bonds! Who gives a damn that they are creating competitve advantages to certain companies with that kind of action?!
Jesus let it rain some brain please!!

The only reason the Fed might do that would be to stabilize the value of the dollar by pegging it to Bitcoin (in the same way central banks did with gold and silver for centuries.)  The dollar price of Bitcoin required to support the global stock of dollars and Treasuries must be astronomical.  I don't think anyone here will have to work at that point.

But that would be a last resort since it would be bad for the reputation of the central banking system.  (It would effectively be admitting, never mind about all the talk that an elastic money supply is superior for the economy, let's go back to the gold standard, or something like it.)

I believe the following list are the elites' plans for the end game of the global asset bubble (listed in descending order of their preference.)  My guess is they are moving on all fronts, so they can implement each plan when the more preferable ones turn out to be impossible.

1. A big growth factor appears.  Say, true breakthrough in technology, or a big segment of the poor world population becoming productive rapidly.

2. A major conflagration occurs (global war, nuclear terrorism, etc.)  As happened after the World Wars, their hope is that the imperial system's victory at the end will enable it to re-design the entire system and blame all 'financial irregularities' on the event.  But they have to do this very carefully.  They have to ensure the empire does win at the end, and that the victory is morally justified.  (To this end it would be in the empire's interest to cultivate and protect really bad actors like Hitler and ISIS in the early stages.)

3. Do whatever is necessary to maintain the asset bubble, for now, until either of the above is achieved.

4. If none of the above is possible, effectively peg their currency against non-state-issued hard monies (gold, silver, and Bitcoin) to achieve stability.  The pegging price will be very high to achieve stability and the high inflation necessary to eat away the current debt overhang, plus letting the authorities stimulate economies to keep the economic pain from being socially or politically destabilizing at the center of the empire.  (This would most likely be done via 'helicopter money.')

All of the above have one over-arching goal in mind: avoid a hard-landing via a bursting of the global asset bubble.  If the latter does happen, the economic pain will be such that the bankers will be blamed for everything and suffer terribly (since the politicians will have the power and public sympathy to divert all of the blame to the bankers.)

(BTW, I don't think the Fed will announce a profit motive for any action except as the best available excuse for something they want to do anyway.  Since the public granted it the monopoly of money creation, it must justify each action as a public good.  In reality, central banks were not created primarily to make money anyway -- they were created to maintain the state-bank alliance to jointly take wealth from the rest of the economy by issuing and artificially propping up debt and other financial assets.)

this is just crazy and it is only a matter of time before the whole house of cards comes crashing down.

Weren't QE's essentially doing just that?


It seems to be next to impossible to keep the ratio constant in such circumstances. Gold and Bitcoin would be the ultimate winners for the simple reason that the dollar will be avoided at all costs. Also, bear in mind the likely repercussions across the world if inflation in the US hits two or three digits range. Who would want to hold the American money, Saudi princes? They are already jumping ship.

Buying stock is a good idea when the PE ratio is low. But it is very high at the monent. It is better not to buy.

Well, believe it or not, a lot of educated people out there (and most mainstream economists certainly) still believe we live under a basically free market, where people who are very rich deserve what they have because other people want what they have to offer.

The Swiss National Bank didn't buy American stocks out of the goodness of their heart -- there's got to be some exchange of favors with the Fed, directly or indirectly.

It's part of the design of the imperial system that the central banks at lower rungs than the Fed (ECB, BoJ, SNB) are more market-manipulative than the Fed.  So that power resides firmly at the center, the center must be perceived to be the most market-friendly, and its assets must attract the most confidence.  (These other central banks are also the first to get into negative-interest territory.)

I never really believe in profit motive when it comes to central banks.  I can't see any moral or profit-driven reason for central banks to try to make money, but the profit motive can be a convenient justification for some actions.

And yet some people still think it's the unregulated systems that are dangerous and easily manipulated.   

Still, it's the standard neo-lib mindset.  Par for the course.  Fits right in with the rest of their pseudo-economic ideology.  Just put it over there with the rest of the corruption.

There are other central banks (like the Swiss National Bank), who are already doing it. In my view it's not necessarily problematic. In fact the central banks might even get more valuable assets than by acquiring debts of other countries.

However, central banks buying stocks becomes problematic, when central banks acquire stocks of their own country to an extent that supports stock valuations. This can be considered market manipulation and immoral expropriation, especially since the Fed generates money out of thin air, but acquires real assets with it.

For me it's interesting that the Fed talks about buying stocks, while acquiring gold would be the traditional option. Maybe the Fed wants to prevent that safe haven currencies appreciate in valuation.... clearly, central bank policy has reached a a point of no return. Bankers are desperate to buy time, before the fiat system collapses.

ya.ya.yo!