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"cluster Of Central Banks" Have Secretly Invested $29 Trillion In The Market

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http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

Another conspiracy "theory" becomes conspiracy "fact" as The FT reports "a cluster of central banking investors has become major players on world equity markets." The report, to be published this week by the Official Monetary and Financial Institutions Forum (OMFIF), confirms $29.1tn in market investments, held by 400 public sector institutions in 162 countries, which "could potentially contribute to overheated asset prices." China’s State Administration of Foreign Exchange has become “the world’s largest public sector holder of equities”, according to officials, and we suspect the Fed is close behind (courtesy of more levered positions at Citadel), as the world's banks try to diversify themselves and "counters the monopoly power of the dollar." Which leaves us wondering where are the central bank 13Fs?

While most have assumed that this is likely, the recent exuberance in stocks has largely been laid at the foot of another irrational un-economic actor - the corporate buyback machine. However, as The FT reports, what we have speculated as fact for many years now (given the death cross of irrationality, plunging volumes, lack of engagement, and of course dwindling credibility of central planners)... is now fact...

Central banks around the world, including China’s, have shifted decisively into investing in equities as low interest rates have hit their revenues, according to a global study of 400 public sector institutions.

Can't wait for it to be revealed the central bankers have invested in London property....

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http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

Can't wait for it to be revealed the central bankers have invested in London property....

Nah that will be Charlie Beans exceptionally generous pension pot will be invested :lol:

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http://omfif.createsend1.com/t/ViewEmail/j/AD679A12EEB1FB26

Central banks and public sector funds in diversification drive

Central banks around the world, including in Europe, are buying increasing volumes of equities as part of diversification by official asset holders that are now a global force on international capital markets. This is among the findings of Global Public Investor (GPI) 2014, the first comprehensive survey of $29.1tn worth of investments held by 400 public sector institutions in 162 countries.

The report, focusing on investments by 157 central banks, 156 public pension funds and 87 sovereign funds, underlines growing similarities among different categories of public entities owning assets equivalent to 40% of world output. It is published by the Official Monetary and Financial Institutions Forum (OMFIF), a global research and advisory group, with the support of DZ BANK and Quantum Global Group.

In the aftermath of the financial crisis, different forms of ‘state capitalism’ have come to the fore, the report says: ‘Whether or not this trend is a good thing may be open to question. What is incontestable is that it has happened.’

The assets of the overall survey of 400 GPIs comprise $13.2tn (including gold) at central banks, $9.4tn at public pension funds and $6.5tn at sovereign wealth funds.

One of the reasons for the move into equities reflects central banks’ efforts to compensate for lost revenue on their reserves, caused by sharp falls in interest rates driven by official institutions’ own efforts to repair the financial crisis. According to OMFIF calculations, based partly on extrapolations from published central bank data, central banks around the world have foregone $200bn to $250bn in interest income as a result of the fall in bond yields in recent years. This has been partly offset by reduced payments of interest on the liabilities side of their balance sheets.

Or perhaps straight from the horses mouth?

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Zero Hedge never complains when CBs buy gold though.

Odd that.

of course they don't complain when the CBs buy gold, they want sound money. Your understanding, or lack of, is what is odd

Edited by evetsm

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Central banks shift into shares as low rates hit revenues

Are you saying the FT article is wrong?

I don't read the FT with the exception of a couple of their contributors.

Of course CBs buy equities. They buy currencies. They buy bonds. They buy gold. They buy all sorts of assets.

ZH's angle is that they want to monetise their gold positions, so nearly every article they promote is weighted towards anti-dollar/anti-banks/anti-west/anti-anything that doesn't enable them to ultimately offload their assets onto suckers for more than they're worth. That should be obvious to everyone.

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I don't read the FT with the exception of a couple of their contributors.

Of course CBs buy equities. They buy currencies. They buy bonds. They buy gold. They buy all sorts of assets.

ZH's angle is that they want to monetise their gold positions, so nearly every article they promote is weighted towards anti-dollar/anti-banks/anti-west/anti-anything that doesn't enable them to ultimately offload their assets onto suckers for more than they're worth. That should be obvious to everyone.

RK -are you really saying the best way zero hedge founders have understood to make money is to create a continous blog of news that talks up one asset? Gold has been falling for months and they've had several articles that talk about this trend.

I'm not saying all of their doom and gloom is justified, it should be read, like anything, with a healthy dose of objectivity and skepticism. I would say they certainly have provided analysis that makes you think and question the world we live in.

Central banks were originally created to by equities. Their primary function being to restore or keep confidence in the financial system. The cosy relationship of buying government bonds in order to finance political promises is a more recent development since WW2. Who in the world actually though government bonds are the safest investment?! Since central banks can never really become insolvent and governments can simply tax more or print more there is no real danger of the institutions pausing to reset. Sure there will be bumps in the road but large deep capital markets like the US bond market have to continue...where else would the money go for low volatility constant return? The only thing that could change this system would be the people naturally migrating to a value transfer system that makes it utterly transparent what the government spends its money on. This is very unlikely - human beings have the ability to manipulate every system eventually.

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Gold is money. When I exchange my paper currency (currency not money) for gold I consider myself to be monetising my position.

Why would anyone want to 'offload' money for paper?

I won't say anything else as this isn't a gold thread and it wasn't me who introduced the subject anyway! :mellow:

Edited by Errol

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I don't read the FT with the exception of a couple of their contributors.

Of course CBs buy equities. They buy currencies. They buy bonds. They buy gold. They buy all sorts of assets.

ZH's angle is that they want to monetise their gold positions, so nearly every article they promote is weighted towards anti-dollar/anti-banks/anti-west/anti-anything that doesn't enable them to ultimately offload their assets onto suckers for more than they're worth. That should be obvious to everyone.

At least when ZH, Keiser and all the others ramp 'precious' you know its time to start looking for shorts. Rinse and repeat for Bitcoin

Edited by aSecureTenant

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At least when ZH, Keiser and all the others ramp 'precious' you know its time to start looking for shorts. Rinse and repeat for Bitcoin

Indeed. Usually means it's near a key support level.

It's fascinating to watch big media brand names retweet ZH as if it's 'the truth'. ZH are experts at leveraging other media outlets/commentators to promote their agenda. Modern day bucket shop techniques using t'internet. Uber smart guys.

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Indeed. Usually means it's near a key support level.

It's fascinating to watch big media brand names retweet ZH as if it's 'the truth'. ZH are experts at leveraging other media outlets/commentators to promote their agenda. Modern day bucket shop techniques using t'internet. Uber smart guys.

So why is ZH getting all the links ? That's all that counts

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