Manipulation of Equity Markets By Central Bankers

Well, you want to know what has been driving our equity markets higher in the face of individual investors leaving it in droves?  The answer, of course, lies with all those "Central Bankers."  Bloomberg reports that he Bank of Israel will begin a pilot program to invest a portion of its foreign currency reserves in U.S. equities.  The investment will amount to 2 percent of the $77 billion reserves, or about $1.5 billion.  At a later stage, the investment is expected to increase to 10 percent of the reserves.  In addition to the Bank of Israel, a small number of central banks have started investing part of their reserves in equities.  About 9% of the foreign exchange reserves of Switzerland’s Central Bank were invested in equity shares at the end of the third quarter.

Incidentally, it is illegal for our Federal Reserve to invest in equity markets.  Now, I see exactly what has been happening.  Our Fed, which can not directly purchase equity shares, has created billions of dollar swap lines with foreign central banks.  Then, these central banks take the dollar swap lines and purchase equity shares on the New York Stock Exchange.  Therefore, our Fed has indirectly been manipulating the stock market through equity purchases of these foreign central banks.  Subterfuge, anyone?  So much for financial integrity.