The Financial Times did a story over the weekend entitled “Central banks shift into equities.” Zero Hedge put this up Monday morning in response. The Official Monetary and Institutional Forum now say that central banks have invested $29.1 trillion into the global equity markets. Before going in to this, now we have a better understanding of how or “why” stock markets are “up.” We wondered how the markets were going up because everyone, EVERYONE so far this year has been reported to be a seller. We wondered where the money was coming from to propel prices higher is everyone was selling; now we know.
I will give you a little perspective on this $29 trillion dollar figure because big numbers are thrown around like penny candy these days and we have become numbed (dumbed) down by such huge numbers. My point is this, there is no longer any shock value to any number no matter how large it is.
OK, in perspective, the value of all stock markets on the planet added together is about $62 trillion. Now it is revealed that $29 trillion or so has come from the world’s central banks. How did this happen? Do central banks have an extra $29 trillion to throw around? The answer of course is no they do not …unless they just print it up and presto …there it is ready and able for whatever folly they choose. For a little more perspective, the Federal Reserve supposedly has a total balance sheet of some $4.5 trillion or about 15% of this $29 trillion (I dropped the “.1” because it’s only $100 billion). But, this $4.5 trillion is all accounted for as being invested in treasuries, agencies …and some “junkier stuff.” Please don’t tell me that the world’s central banks are doing something that the Fed is not… or worse, the Fed is doing something that they are not admitting or accounting for!
Do you understand what this really means? The Fed (central banks) own nearly 50% of all stocks. This means that yes, stocks are really manipulated and the tin foil hat crew was right again. It means that central banks can keep on creating fake money and putting that money into stocks to create fake(r) values…or …they can tank all of the stock markets worldwide at will with the press of a single button that has the word “sell” on it.
Going even further down the rabbit hole, this means that central banks own nearly half of the equity in all publicly held businesses. It means that by simply printing money, they have “privatized” the world! Of course, there is no telling as to when exactly this scheme started but let’s assume that sometime late in 2008 or early ’09 would be a good guess. The markets needed support and it was a good entry level. Maybe this was something that “just happened” and then morphed into its current size? Maybe it wasn’t on purpose? I doubt this is the case as everything is orchestrated today, as the CIA is well known for saying, “There are no coincidences.” Who will the central banks sell to if they want out? Ahh, but why would they want out when they hold almost a majority position of the entire world.
So, we have wondered how the stock markets have done, what they done and we wondered how in the U.S. the markets have done well while the Fed has tapered their QE by $1/2 trillion annualized. Now we know $500 billion is a pissant number that has been camouflaged by other, massive buying. Gold investors have also “wondered” how gold could go down in price while physical demand has far outstripped the actual supply. “We” have told you how for a long time now, all the while being called tin foil hat wearing conspiracy freaks. We told you that at least 100 ounces of “paper gold” were being created to divert capital away from the real thing. We told you that these paper ounces were being used to “dilute” the real thing and hide what was actually happening. Do you believe us now?
Now that it turns out that an extra $29 trillion has been printed and “put to work” you must ask yourself several questions. First, if it was so easy to create all of this money (in the dark) and it is so plentiful, what is the money itself worth? What is it REALLY worth? Also, if the markets are where they are because of “unnatural” buying, where would they be trading on their own? How much lower? If gold is priced where it is today because there are 99 fakes out there for every real ounce then what is a real ounce worth if it is actually 99 times rarer? An even better question is this, if central banks were the sellers of real tangible gold for so many years and the conspiracy nuts are correct (as usual it seems lately) and the coffers are low, then what is an ounce worth?
Let me ask this question in a slightly different manner. If the West’s central banks have very little gold yet retain the ability to print money and suddenly decide that they would like to stack some of the “lost” gold, what would that do to the price? Or even differently, if money supply approaches infinity and gold reserves approach zero…then what price? Is the answer not infinity?
I hope that this revelation sinks in mentally for you. If not, please reread this because this is what it’s all about. You have been beaten over the head for at least 2 years to either sell your gold (and silver) or at least don’t buy it. It has been a psychological operation aimed directly at your finances through your emotions. Hopefully it hasn’t worked. If it has worked, then it is your jobs to “un” work it. Stand strong, buy more or buy for the first time, we now know that we are (and were) 100% correct, nothing should get between you and your insurance policy!
Huh, Apparently, we underestimated how large of a transfer of wealth will occur to the holders of precious metals. Who knows if 29 trillion is correct. It is so large, most likely, no person could figure out the real number. No matter, price discovery will figure it out, sooner than later, i believe.
a good way to look at it.
RE:”Let me ask this question in a slightly different manner. If the West’s central banks have very little gold yet retain the ability to print money and suddenly decide that they would like to stack some of the “lost” gold, what would that do to the price?”
Weeelll…given again, that my “logic” has been WRONG for, oh, about all of the last recorded period of history (5 years or so) now…my FIRST thought was that they’d drive the price of gold DOWN, to acquire it as cheap as possible.
Notwithstanding the fact that they have “unlimited” fiat to print to buy it (at ANY price they want), that won’t stop them, having greed as an INNATE and UNSEPARABLE quality inside themselves, to want to MAXIMIZE their profits, even if that really is meaningless (in reality, since they can print to infinity)…so they would drive price down to buy it cheaper, and feel better about themselves, and screw us EVEN MORE…
Dunno…was my FIRST instinct and thought on reading that, although I eventually arrive at the same “conclusion” for the system overall (with the 100:1 ratio, and “probably” price increase accompanying that realization, as measured by “something”? not sure what that SOMETHING is is the problem)…as fiat won’t mean the same at that time.
Anyway…very good article and analysis, just don’t quite know how to turn it into action that they can’t just THWART by printing to buy, or printing to drive price down (so they can buy more)…
you thwart it by stacking as fast as you can, period, end of story.
In theory agreed, but if we had waited 18 months to “stack” vs prior, our “stack” would be 50% larger now, and that is not insignificant. I realize there’s no way to know “when” the line is crossed…just sayin…
And do you stack it in hand, or in the ground (miners)…or combination?
Really Red? I walked away from this for 30 mins. so as not to go into a tirade. You really don’t get it do you? This is not about what “price” you paid, only whether you have metal or not. You said “for 5 years” …5 years ago you could have bought for less than $1,000, were you wrong? Only for the last 2 years has price been going down but I just spoon fed you the reason why…everything is rigged, EVERYTHING! Is it my fault that I couldn’t break the rig and bring truth out and into the markets? The point is this and if you don’t get it then I guess you don’t get it. When the rig is up, you will not be able to purchase precious metals. No one will sell for fiat and you will no longer be able to call Miles Franklin because we won’t have any, none, zero, nada! Then what? Oh, then you will say “I should have stacked more”! Do you get it now?
Well, my intent wasn’t to raise blood pressure, in any way, as we certainly don’t need more of that, so if that’s how it was received, my apologies.
In a way, I suppose it’s venting some pent-up frustration (that i’m sure i’m not alone in having) at the scale of lies, fraud, manipulations, deception, greed, etc, etc, etc, that seems to be all pervasive, everywhere, by almost EVERY entity (political AND CORPORATE) , and that is to say at the least, not a good environment to move forward into, although we have to.
So, i’m jaded yes. for EVERY SINGLE scenario I can think of, I can think of multiple ways to defeat it, if I were of the mind to.
Stacking: theft, vault theft, confiscation (of which you write about on your own site, taxation, etc, etc, etc…)
Miners: same things, theft, fraud in corporation, nationalization, etc, etc, etc…you can list many more.
GOTS stuff…well, AGAIN, you’re dependent on who you “trust” and there seems to be zero trust, anywhere…so those you trust can take it, have it “disappeared”, stolen, whatever…you name it, and it could happen.
So…given that I agree with your writings, which maybe wasn’t apparent, is that even then, knowing that, I cannot think of a single way to foolproof move forward. Zero. None. Nada… Unless I’m too small to be cared about, or get just “lucky”, or are in God’s grace, there isn’t anything I can see to plan that has (even a small) chance of working, stacking included.
Am I over complicating things? Maybe. Am I understating the level of fraud deception and lies out there, probably also, even our worst guess is just a tip of the actual level of fraud.
Anyway…Keep up the good work, and God Bless those who are trying to do things in an honorable way. that’s really all that I can see is left to do.
all you can do is the best that you can do. It may not work but you must try. We cannot take it with us and can only hope that our efforts will somehow benefit our children and grandchildren. God bless you too Red.
Thanks again for summarizing the truth Bill.
How did this happen? Does “with lies, fraud and deceit” cover it?
Also, not sure if you saw Jim Rickards tweet last week:
Jim Rickards @JamesGRickards · Jun 11
Spoke to head of global commodities trading at LBMA bank. He expects a #gold “demand shock” from #China credit crisis. May be game on there.
God help us all. The world is about to become unrecognizable.
Bravo bill..! I read you & Andy’s work everyday. I diluted myself early on like many silver & gold bugs do. Relishing the thought of trading fiat for metal. I believed that when the system resets my new found wealth would somehow help me transition to the new “1%” unscathed. But as the years have gone by & with the system still intact. I’ve realised there is something bigger in play. The masters behind the monetary levers I believe seek more than just $. Ultimately Gold & silver are peanuts in the grand scheme of things. I believe they are after the soul of humanity. To traffic in the soul of man is the pinnacle of power. Call it NWO tin-foil hat stuff or what have you. But when you step back those dots really do seem to paint this picture. A system, a society where if you wanna participate, your soul will be the collateral.
this is about far more than “money”, yes.
Bill You and Andrew Hoffman have quite the knack for putting things into perspective! Excellent article.
Red Income averaging solves the problem of buying at peaks. I’ve bought ASE’s at $6.50 and at $54.00. Buy some every week whether you need it or not!
yes, you get it. And thank you, we try.
Yes, we will all do the best we can do. God Bless and thanks for the continued writings.
This is a fantastic article Bill. Thanks to bring it into perspective.
Now if I may phrase something in a constructive and participatory way, one area that your article did not explore enough is: If it is true that Central Banks now own 50% of world equities, then what impacts and consequences will be derived from this in the future?
If this story is true then this is by far the biggest fraudulent financial power grab in the history of mankind. The corrupt banksters owners of this fraudulent debt base monetary system are now more powerful than ever. They already own the vast majority of politicians around the world, They have placed their corrupt insiders at the head of regulatory agencies and public institutions so they can act as they please in full impunity. And now they own 50% of world equities/corporations (and more as 50% is only what Central Banks have purchased leaving apart what the infamous 1% already owns)?!!
The size and impact of this power grab is mind blowing. It goes much deeper than most would think. You only need a few at the top of the corporate pyramid to control everything. Basically they can now do whatever they want. They own the Western World and more (there are just a few nations left fighting to retain their sovereignty).
The size of this power grab could also help explain why they are moving so confidently, relentlessly and aggressively against Russia.
Going back to gold, it does raise the following question: Given the now incredible reach of the power that be, are they in a position of permanently suppress the price of gold and impose a new world order without ever having to go back to some form of a gold standard?
Will emerging nations such as the BRICS be able to rise up quick enough and implement their parallel financial/trade/monetary system in time?
Not trying to be negative or gold bashing here but I think that as investors and analysts we have to seriously look at this question. Underestimating the strength and reach of the manipulators would be foolish.
Will the sheeple ever wake up and revolt against the relentless destruction of their livelihood and living conditions? The last Europeans elections were positive in this regard although it remains short of what is needed to overthrow the fascist banksters.
The NWO system aims at developing a set of supra national institutions governing the world away from the reach of national democracies. As example, look at the TPP and TTIP supra national “special” corporate tribunals to settles disputes away from national laws or the unelected IMF and World Bank chewing up national sovereignties by imposing their deep reaching austerity measures. This system is not quite fully established yet. Will alternative/emerging new political parties come on time to avoid the establishment of such system?
I am just throwing in a few ideas for analyzing this tremendous piece of news and how this might impact the PM’s market.
Once again, thanks for your work. It helps us analyses the whole situation.
thank you Eric. My Dad always told me that water will always seek its own level and cream rises to the top. PM manipulation will end when it becomes realized that there is none left to deliver against paper promises.
Bill, you are a god-damn genius. Period.
No, just street smart with common sense, but thank you.
This is checkmate on many different levels. Several quotes come to mind but one in particular from Jefferson:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
This pretty much sums up what is and has taken place since 1913. TPTB are making us so poor that we will be unable to resist them. Think about it, through Fannie and Freddie, TPTB own over 90% of all mortgages. We have known for years they control all politicians, both red and blue. They’ve had a monopoly on issuing world reserve currency units. Now we find out they have secretly become the majority share holder of the majority of stocks. This gives them majority voting ownership of private corporations. Checkmate: they own our homes, own our laws, own our money and now own the corporations big and small. Where will you live? Where will you work? Where will you get money? where will you run for legal protection? CHECKMATE!!!!
Our only play is to hang our hat on the 5 G’s….God, gold, guns, groceries & good friends/neighbors.
yes, correct Mark.
How could central banks covertly buy half of all equities and only now be discovered? $29 TRILLION and only now we realize it? I always knew the fed “could” buy equities, but did not know they actually may, or that other central banks do own equities. If this is true, 1) it is an absolute bombshell and is scary that something that large could go on in secret without the public knowing about it, and 2) take us to defcon 1 because this is Bizzaro World on steroids.
we knew for a fact about the Bank of Japan buying stocks and had a pretty good idea about the Fed buying futures through proxies. This is such a mind blowing number, too big to either believe or wrap your brain around. I have not seen any corrections or denials to this number and it’s been out for 48 hours.
Looks like we have been joined by another RED. If so, Since I was the first Red I will now be known as Red1
While I agree that the entire global economy is in dire straights and overdue for a reset there is no need to embellish the truth. Can I offer a a correction and observation?
1. From Bill Holter – “The Official Monetary and Institutional Forum now say that central banks have invested $29.1 trillion into the global equity markets.”
This is not correct. The FT article says
“Although scant details are available of their holdings”. “The report, seen by the Financial Times, identifies $29.1tn in market investments, including gold”.
It actually says *including* gold. Not just equities. And we have no idea whatsoever of what percentage of those holdings is made up of gold.
So in all probability central banks do not “own nearly 50% of all stocks.”.
2. From BT “Overall, the Omfif report says “global public investors” have increased investments in publicly quoted equities “by at least $1tn in recent years””
Again, there are no details on what recent years means but $1tn is just a small percentage of the $29tn. Public investors have always invested in equities as well as other assets.
Really? Embellish” All the gold in the world is worth less than $7 trillion. Central banks (maybe?) own 30% of this figure so instead of $29 trillion let’s say that it’s $27 trillion in equities. Doing the math, instead of 46.7% it works out to 43.5%…so, sorry for the “embellishment”. Now, I have a question for you Aaphid, what the heck business do central banks have investing in ANY equities at all? Let’s say that I really really really “embellished” as you say and the central banks own only 25% of all equities. Why? For what reason? What business is it of the central banks to own equities. Wake up dude, this is not about decimal points or exact percentages, this is about “the point”. Do you understand “the point”?
I’m not trying to argue with or upset you here. Heck, I’m in the same camp as you. I also believe that we’re being shafted by a corrupt political/financial system. But I don’t like seeing alarmist articles being published on the web. Especially when they are reprinted and broadcast to a much wider audience such as this article was on JS Mineset.
To respond to your comments.
You said “All the gold in the world is worth less than $7tn”. You’re talking about physical gold here. And it’s possible that these organisations have large holdings of paper gold. By your own reckoning paper gold could add up to another $700tn.
“what the heck business do central banks have investing in ANY equities at all?”
The FT article says ““global public investors” have increased investments in publicly quoted equities “by at least $1tn in recent years” – without saying from what level, or how the figure is split between central banks and other public sector investors such as sovereign wealth funds and pension funds.”
So it doesn’t say that all of this money is coming from the central banks at all. Many countries and States run budget surpluses and with some of that money they make international investments. Others without surpluses also make investments. So what? This isn’t a new phenomena, it’s been happening for decades if not centuries. And of course pension funds will have a large portion of their money in equities.
“Market investments” versus “stock markets”.
You said “The Fed (central banks) own nearly 50% of all stocks.” However the FT article said “market investments” which could include markets such as fx, and bonds, etc?
Maybe I could also ask you for supporting evidence for the following statement. “EVERYONE so far this year has been reported to be a seller”
There’s a couple of other points I would like to make but I don’t want to go on right now. The point I’m making here is that your article suggests a number of things that just aren’t proven. It would be helpful if we all could see the report to see what the finer details are. But we can’t. And so, as Ted Truman commented in the FT article “Reforms are urgently needed to enhance the domestic and international transparency and accountability for this activity – in the interests of a better-functioning world economy.”
Transparency and accountability is what I also would argue for. Facts rather than misleading guesswork. I hope that you and your readers would agree.
Goldman Sachs was scratching their head for the month of May (not for the year as I wrote). http://www.zerohedge.com/news/2014-06-08/sell-may-they-said-and-so-they-did-goldman-finds as “everyone was a seller” including and especially insiders. As for $700 trillion worth of paper gold, paper is not gold and will not stand up when everything falls down, it can and has affected price as was one of my points. Gold is a very small part of central bank holdings, probably far less than the $2 trillion claimed but I guess we will find out soon enough. As for the “central banks”, yes you are correct, the article would include sovereign wealth funds and theoretically public pensions, my mistake. My point was that central banks have absolutely zero reason to own ANY equities other than to levitate prices or otherwise support or “rig” the market. Yes I believe that bonds would also be included as marketable securities but not FX, ie swaps or dollars (or other major currencies) as they would be considered reserves. Even if the number turned out to be 5-10%, central banks are doing what they should not do and never would have done unless they were forced to do it. … OR as a speculation, we are watching the privatization of the globe in real time. Far fetched in a normal world? Yes, absolutely. Would you put this past those pulling the levers in pursuit of total control and power? Thank you for your corrections.
Bill been watching you and Jim S. for years now.Was in the business in a small way for 10 years.I have had a tin hat for years,(can send photo).We are about the only 1% that knows what is going down,I’m 70 now and remember when we sort of had a free country.The 50s through the 80s were the best part of our country.History tells us nouthing last for ever,not even our republic.Forget it,it’s over as you well know.But i have never delt with Miles Frankiln as i have more than i can carry now.Please read between the lines.But i called John Hubert today and told him how much i liked that cowboy Bill,and was told he is NOT a cowboy,he is a horseman,and never call him a cowboy or you will catch hell.Well Bill i have lived in Montana 23 years.And unless you don’t really know what a cow looks like,then i guess he is correct.We are a lot alike”trust me”,and i would enjoy your friendship.Sorry i never learned how to spell in school,liked beer and nice girls better,never thought there would be computers.And don’t care for them.A man talks nose to nose,and a handshake is still a valid contract in my book.You have my email and i won’t put more here.But it would be an honor to talk one on one.I tried to keep the flag high for years ,but it falls on deft ears.I thank you for your effert to keep it up but have seen the light and talked until i was blue in the face.But as you well know everyone wants something for nouthing in the US at this time,and that won’t work.So cowboy,damn i did it again (old age i guess),horseman,you and yours are welcome at my house any time.The light is on and good food on the table.
God Bless and keep you and yours.
Can send more info.
American and proud of it
thank you for the kind words Tom.
Hey Bill this is why I have to stop by here and read you and Andy’s stuff. Your analysis is addictive and correct. If there are 99paper claim to every ounce of gold then the price for an ounce should be 99*1270.00= $125,730.00 per ounce..
Also the banks are levered up to 30:1 so if we multiply the fed’s QE of 1Trillion (what is was at that time) we get the 30 Trillion. But don’t forget that according the the video by Brother John F, Lyn Forester De Rothschild said 250 wealthy people were in a room at a conference she was holding. These people control 30Trillion dollars worth of assets. Do you think that is a coincidence that this information about the 29.1Trillion came out right after she had that conference. The Rothschild are bankers and you can be sure those people she had in there were Central Bankers. Don’t forget that Forbes 1000 richest people are only Billionaires which total 6.7 trillion. These people own 40% of the worlds riches and what you just wrote justifies it.