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$29 trillion controlled by the central banks?

Big Al
June 18, 2014

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65 Comments
    CFS
    Jun 18, 2014 18:27 PM

    Meanwhile on UK news TV……

    https://www.youtube.com/watch?v=KClImYRa1qM

    Does Obama have a clue?

      Jun 18, 2014 18:41 PM

      Obama had a strategy as he has supported what has just so happened to be Islamic fundmentalist takeovers in Libya, Egypt, and now Syria (don’t forget that similar groups will now likely lend support to those threatening Iraq). No idea what he was thinking about Iraq, but maybe he is switching strategies to be “show complete incompetence”? I don’t know another or better solution.

      Jun 18, 2014 18:34 PM

      The interview I heard cut short after bob said “it could be china’s”

    Jun 18, 2014 18:34 PM

    Whether or not that number is correct, there is no way for anyone to know how large the investment is directly or indirectly from central banks (not just the Federal Reserve, also don’t forget the PBOC that no one will ever have an inkling about).

      Jun 18, 2014 18:51 PM

      You are right that we should not forget about the PBOC. They have a bigger balance sheet than the Fed. I don’t think we will ever know the exact nature of the investments made by the central banks… if we do not want to believe what they tell us.

        Jun 18, 2014 18:17 PM

        Good point. If they are diversifying out of dollars they could not have done better than buy US equities these past few years. By the way, how do you guys get your pictures in the photo box? I cannot figure it out.

    CFS
    Jun 18, 2014 18:34 PM

    From CIA FACT BOOK, List of Country’s securities net value. Top 14 countries.

    RANK
    COUNTRY MARKET VALUE OF PUBLICLY TRADED SHARES DATE OF INFORMATION
    1 United States
    $ 15,640,000,000,000
    31 December 2011
    2 China
    $ 5,753,000,000,000
    31 December 2012
    3 Japan
    $ 3,541,000,000,000
    31 December 2011
    4 United Kingdom
    $ 2,903,000,000,000
    31 December 2011
    5 Hong Kong
    $ 2,814,000,000,000
    31 December 2012
    6 Canada
    $ 1,907,000,000,000
    31 December 2011
    7 France
    $ 1,538,000,000,000
    31 December 2011
    8 Brazil
    $ 1,229,000,000,000
    31 December 2011
    9 Australia
    $ 1,198,000,000,000
    31 December 2011
    10 Germany
    $ 1,184,000,000,000
    31 December 2011
    11 Korea, South
    $ 1,078,000,000,000
    28 December 2012
    12 Spain
    $ 1,031,000,000,000
    31 December 2011
    13 India
    $ 1,015,000,000,000
    31 December 2011
    14 Switzerland
    $ 932,200,000,000
    31 December 2011

      Jun 18, 2014 18:08 PM

      Help me out here………what does that total……….and that WAS 2011, which means they have more now………?

    Jun 18, 2014 18:36 PM

    What is a couple of TRILLION ,here or there…………..

    Jun 18, 2014 18:36 PM

    The report, seen by the Financial Times, identifies $29.1tn in market investments, including gold, held by 400 public sector institutions in 162 countries.

    MARKET INVESTMENTS include bonds, shares and gold. To ignore bonds and gold and say they own $29 trillion in shares is absurd. And totally incorrect.

    Bob

      Jun 18, 2014 18:50 PM

      So basically this is the amount of investments held by all the sovereign pension funds plus what the CB’s bought plus those purchases made by agencies on behalf of governments? And if most of it is pension fund money then really all that means is that the purchases were made on behalf of future retirees rather than the suggested byline that CB’s had just fired up the printing presses and bought up half the worlds equities of their own volition. In other words it is real money and not ginned up electronic cash. So then in other words the markets are still somewhat normal. Whew! For a few hours there I really thought I was losing my mind. Craziest damn story I ever read. Thanks Bob!

        Jun 18, 2014 18:54 PM

        Good breakdown Bird. The story presents a lot of vague details. it took us a while to try to understand what the author was trying to present.

        Jun 18, 2014 18:20 PM

        They sure had me going!

    Jun 18, 2014 18:40 PM

    BOGUS NUMBER….maybe…………BOGUS FED. for sure……..
    Bob, do you believe the fed. balance sheet?…..FED LIARS……

      Jun 18, 2014 18:59 PM

      Bob, can sure buffalo you guys…………..BOB, many of zero hedges article are correct, I think to say they “MAKE STUFF UP”…..is way out of line……unless you prove it.
      IF, you can prove it……we shall take them off the list of recommending their website.

        Jun 18, 2014 18:27 PM

        IF ZEROHEDGE makes STUFF UP ……….I guess they will be trashed as LIARS, and could join the FED AND THE OBAMA ADMINISTRATION…….imho…………….j…ootb

    Jun 18, 2014 18:41 PM

    BOB you are always a great listen to…………really……………j

    CFS
    Jun 18, 2014 18:42 PM

    Meanwhile the President is pushing global warming.

    However in Turkey……
    http://www.sott.net/article/280474-A-week-before-the-Summer-Solstice-in-Europe-and-8-inches-of-snow-falls-in-Turkey

    LPG
    Jun 18, 2014 18:46 PM

    Here’s the Zerohedge article.
    http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

    Doesn’t seem like too much non-sense to me gentlemen…But talking about it without reading it (which seems to be the case of some people) can lead to flawed conclusions and erroneous comments, IMHO.
    No offense… just trying to put “facts” (the article content) back in the discussion.
    Best,
    LPG

      Jun 18, 2014 18:53 PM

      It is the words “secretly invested” that send my brain spinning. Good plot line though.

      Jun 18, 2014 18:54 PM

      DID AL READ THE ARTICLE………YES OR NO………?
      DID BOB READ THE ARTICLE…………YES OR NO?

        Jun 18, 2014 18:56 PM

        I did and please listen to the current interview that is up. I did some serious correcting.

          CFS
          Jun 18, 2014 18:05 PM

          As I was the one who brought Jim Sinclair’s article to Big Al’s attention, it is as much my fault as anyone.
          I try to present articles up for public interest, and I often make comments about sanity of article, but obviously I did not fully think about it.
          (Actually I used Billions rather than Trillions when I first posted the article and had to correct that.

            Jun 18, 2014 18:11 PM

            I do not see that as your fault………..THE bottom line…….maybe TWO QUESTIONS
            1. is zero hedge a good source……yes or no.
            2. if, so ,is the number correct, ……..yes or no.

            CFS
            Jun 18, 2014 18:34 PM

            When I read zerohedge I often check their original source.

            I think the Financial Times was asking the question: Just how much money is being (or has been) created by Central Banks and where is it going?
            If you want to estimate the total inflation and its effect on prices, that is a good number to look at.
            They arrived, rightly or wrongly at a total of $29 Trillion.
            Then they compared it with total assets held by all central banks of $55 Trillion.

            That tells us eventually a crude estimate of where prices will grow when things settle down could be about a double.
            Of course it will vary from country to country, but in this interconnected world it gives a crude ball-park guestimation.

            Unfortunately Zerohedge, did not closely read all the fine print in relaying the article, and mis-named the asset group.
            Zerohedge does sometimes over-hype a story, but I find them to be more often correct than incorrect.
            I also find they are probably the most prolific source on the net for economic information. I scan through their articles almost everyday.

            Jun 18, 2014 18:51 PM

            thanks for going over the article………I also, read zerohedge daily,,,,but, if they are a questional source……..I will think twice before I use them as reference………

            CFS
            Jun 18, 2014 18:56 PM

            zerohedge source was FT, The financial times does not usually make mistakes.

          Jun 18, 2014 18:37 PM

          I listened again. It’s a lot shorter now. And all the inflammatory material is gone. Those ZH lawyers must be fast!

      Jun 18, 2014 18:56 PM

      Too often stuff on ZeroHedge is a false or misrepresents the facts!

    Jun 18, 2014 18:51 PM

    No matter what anyone say’s there are enough well informed people who know that the markets are being juiced. If we get what they like to refer to as a technical position in the market where by distress selling starts happening in the market and margins aren’t being maintained satisfactorily, believe this, you will see big banking firms which have received Fed funds buying stocks in the open market. So Bob is correct only in the fact that you won’t see funds from The Fed going directly into the market but they have plenty of whipping boys to do their bidding. A lot of liquidity has entered the stock market from The Fed through the back door.

      Jun 18, 2014 18:01 PM

      There is no doubt the markets are propped up by Fed money just not through direct Fed buying. All the money being loaned at practically zero percent to the banks have to go somewhere. This can not last forever however it is hard to say when it will all end…

    Jun 18, 2014 18:52 PM

    A HEAD NOD TO THE CHIEF

    Did anyone notice Chairman Yellen’s continual head nod.
    Everything she said she said accompanied by an affirmative head nod.
    It is as if she was indicating you have to agree with what I am saying.
    It was like she was asking “Would you like fries or a shake with that?”

      Jun 18, 2014 18:12 PM

      good one Dennis………..she does look like she could work at STAKE AND SHAKE….

        Jun 18, 2014 18:04 PM

        Yellen bobble heads are on order from China as we speak no doubt. You can mount them in the rear window of your car and she will wave goodbye to the middle class as you drive around town!

    Hal
    Jun 18, 2014 18:01 PM

    at 12/31/12 global stock mkt cap was ~65 Trillion and US was just over 20 trillion.

    Bob is absolutely correct in that the asserted 29 t incl gold and bonds in addition to stocks. China and Russia buying gold, we buy Treasuries. Who is smarter?

    however since the 29 started in 2009 when the market was much lower, say 2/3 lower, that’s what lit the fire including driving rates lower to get retirees for example out of fixed income, theprinted money put in market then had a much bigger effect.

    the gate they are talking about that Janet knows nothing about at this point is for bond FUNDS, so they go after mid america while the big boys can bail out of bonds.

    Jun 18, 2014 18:16 PM

    One of the troubles The Federal Reserve has created for itself and that is evident in Chairwoman’s Yellen’s speech is how do they keep volatility under control. This is so important if you want to maintain market credibility, so it looks like they have a lid on this one facet that is very important, but when we see volatility increase they will be very worried.

      Jun 18, 2014 18:22 PM

      When stock prices keep rising if they raise the rate they bring about a smash scenario. The Fed is walking such a fine line that can’t be maintained and when the speculative fever starts to worry volatility will happen.

        Jun 18, 2014 18:37 PM

        Volatility in the gold market is part of their control, the last thing they want is for gold to move up and malign The US dollar. This is what is driving technical analysis. As if we didn’t know.

    Jun 18, 2014 18:46 PM

    The Fed is printing so much money that they have discounted everyone’s future and the future of their great grandchildren that haven’t been born.

    Jun 18, 2014 18:02 PM

    Mr. Moriory has been denying there was manipulation in gold for many years. After convincing evident showed that there is serious manipulation, he changed to “who cares about whether there is manipulation or not” instead of admitting he was wrong. He should know No manipulation and Who Care about manipulation are two different things, one is factual and the other is opinion. He may not care but a lof of people care. Some people are scared out of market thinking it is hopeless in gold because they assume this is free market. Mr. Moriarty hold some responsibility. I really hope he does not draw conclusion without serious research. Everyone knows it is easy to show something exists when you have evidence but impossible to show it does not exist.

      Jun 18, 2014 18:21 PM

      Can anyone show me that god does not exist?

    Jun 18, 2014 18:22 PM

    All markets are manipulated all of the time and every serious investor knows that. I have made the point for years that manipulation is meaningless. And it is meaningless so let’s not be putting words in my mouth.

      Jun 18, 2014 18:34 PM

      Bob,

      Just want to know did you say there was no manipulation by US government and FED to systematically suppress the gold price? If not I may remember it wrong. However, I would not answer whether there is manipulation question with an answer manipulation is meaningless. It means a lot to the investment strategy. Take care.

    Jun 18, 2014 18:08 PM

    Gold went from $252 in August of 1999 to $1922 in September of 2011. Anyone suggesting gold was manipulated down needs new batteries in their calculator. By 2011, gold and silver went up more than any commodity from 1950. Gold may well have been manipulated but for certain it wasn’t being manipulated down.

      Jun 18, 2014 18:35 PM

      I just found some new batteries…………….On the new batteries , there was an ad for PAPER GOLD…

      Jun 18, 2014 18:58 PM

      Thanks for confirming my not “so clear” memory. I will not argue about this today. However, I have a few suggestions:
      1. Check with Dr. Ron Paul or Jeff Deist about the central bank’s gold suppression. Dr. Paul told me in person it does exist
      2. Check Larry Summers’ work about the link between long term interest rate and gold price.
      3. Check Mr. Greenspan’s words about if gold price rises, FED stands ready to INCREASE the quantity of gold leasing to bring the price down. What does INCREASE mean?

      You may forget 20 year’s bear market in which every trick was used to suppress the gold price. Gold only attempted a comeback and recovery. Jim Sinclair called it managed retreat.

    bb
    Jun 18, 2014 18:50 PM

    Great thread, not stopping reading zh tho.

    Mr.Bob, cant tell you how much I respect your opinions and work, but I have found when I agree with everything someone says, something is a tad off somewhere.

    Besides, Im not sure if your taking into account Karen Hudas “long headed: aliens.

    Jun 18, 2014 18:20 PM

    Karen Hudas says she knows the Bank of Hawaii contains 195,000 tons of gold. You are allowed to think for yourself and to do some research. According to Google there has only been 174,000 tons mined. It’s pretty easy to figure out who is making stuff up.

      Jun 18, 2014 18:04 PM

      + the Bank of Hawaii doesn’t have a vault that could hold 195,000 tons of gold.

        bb
        Jun 18, 2014 18:43 PM

        Skeeta, you been there? I believe she said 170k, maybe Im wrong. I got her story from her and it was a great historical read, but I like that kinda stuff.
        Anyway, having heard parts of it here and there in the past it sorta sounded to me hat it might all very well be true.
        Especially with guys like Eric Sprott not having a clue where all the gold was coming from.
        Anywy, I am happy giving her the benefit of the doubt due to reputation of previous work and her true desire to help her country, it was the long headed aliens that got me wondering.
        And as far as Im concerned even if she does think they exist it doesn’t mean she is wrong about the story or the gold.
        The story is an interesting one, as far as I know I am the only person around here that has read it. I wouldn’t mind an informed opinion.

    CFS
    Jun 18, 2014 18:59 PM

    OMFIF started the discussion on Central banks buying equities.

    Here’s the Chairman of the organization on CNBC:
    http://video.cnbc.com/gallery/?video=3000285218

      bb
      Jun 19, 2014 19:01 AM

      I didn’t realise that Skeeta, you just might have a point there. lol

      On the other hand, if I recall, Ms Hudas story recently had the gold in the Philipines, later some in Hawii was being mentioned, maybe is in more than 1 vault in various locations?
      Tuff to believe these guys that have been accumulating for over a hundred years or was it longer Ive forgotten, would let it be known where it actually was.
      Even the US gold is in 3 locations?

      Pot growers for example years ago would name their product “texas t” when it was grown in Saskatchewan etc Pretty old trick. Doesn’t mean it didn’t exist.

      I know, “tin foil” hatted gullible believe anything etc etc
      except for that darn story, you see, I read this stuff for years thru studying history, and par chance a few years ago I met a lady from Italian royalty, her family was allied to Mussolini, in Brazil now. If you recall a few facist allies ended up in south America. Interesting stories, fits with what Ive read about their move to south America.

      You ever see the movie monument men? See the number and size of those caves?
      That was about 10 years worth, Karens story goes for generations thru various royalty their relations churches, temples and multiple wars on just about every continent.
      That’s a lotaloot.

      And when you find out how tight these guys are, how interrelated, heck, I have no trouble believing its the same bank pretty much everywhere.

      There is a rabbit hole out there so deep we are finding underground cities that have existed for thousands of years that were built for 10s of thousands if not 100s of thousands.

      This earth has been producing minerals for a very long time.

      Besides were being controlled by aliens, so its gotta be true. lol

      Thanks for the link, good one.

    Jun 18, 2014 18:20 PM

    It is funny that Bob says the report is nonsense when the link to the original source is on his own site. Stewart Thomson wrote about it and it is public institutions which includes pension funds, not just central banks.

    http://www.321gold.com/editorials/thomson_s/thomson_s_061714.html

    http://www.omfif.cmail2.com/t/ViewEmail/j/1D55151523119EEE/4F3BFB0D1DD48771EBAD456BEB5F1DD6

    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 OMFIF’s 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. The publications is supported by 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 Global Public Investors comprise $13.2tn (including gold) at central banks, $9.4tn at public pension funds and $6.5tn at sovereign wealth funds.
    The publication outlines investment by organisations as diverse as the People’s Bank of China and State Administration of Foreign Exchange (SAFE), Japan’s Government Pension Investment Fund (GPIF), Swiss National Bank, Norges Bank Investment Management (NBIM), China Investment Corporation (CIC) and Californian Public Employees Retirement System (CalPERS).

    It includes, too, Bank of Korea, Malaysia’s Khazanah Nasional, Public Investment Corporation (PIC) of South Africa, Temasek of Singapore, Australian Government Future Fund, New Zealand Superannuation Fund, Canadian Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan (OTPP).

    The financial centres of Frankfurt, Hong Kong, Kuala Lumpur, London, Johannesburg, Mauritius, Qatar, São Paulo and Toronto are supporting the study.

    The publication features in-depth descriptions of the investment approaches of public institutions and provides an easily-understandable guide to the overarching issues that link these different bodies, complemented by an analysis of the common economic themes that influence change in their behaviour.

    A centrepiece of the publication is a leading-edge ranking of the world’s largest 400 public investors based on assets under management of central banks, sovereign funds and public pension funds – the first such integrated assessment of multiple categories of public funds in a single listing.

    Jun 19, 2014 19:17 PM

    This from David Chapman, “The report to be published is from the Official Monetary and Financial Institutions Forum (OMFIF), a central bank and advisory group. The report identifies some $29.1 trillion of central bank assets are held in market investments. No not all of that is in equities. The bulk of it is in bonds mostly government bonds. Some is held in gold. ”

    “However, OMFIF did note that upwards of $1 trillion of central bank assets were in equities. ”

    According to Google there is $55 trillion invested in equities in the world. $1 trillion is less than 2% and essentially meaningless. Central Banks do not hold a meaningful equity position. The original article in the FT was misleading and the vast number of people commenting on it don’t get it. $1 trillion of Central Bank money in equities is pretty meaningless.