Submitted by aka.attrition
Central Bank Balance sheets vs. S&P 500
Source: https://mobile.twitter.com/jsblokland/status/1578850905558220800
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Weird. Assets are denoted in $. It’s easy to see the ECB and the bank of Japan’s assets go lower due to the appreciation of the $.
Not sure how that correlates to the the SP 500.
In order to make this chart one must convert all central bank assets into some base currency. It doesn’t matter which base currency you use, dollars, euros, pounds, yen, whatever, you get the same chart. It makes sense to use dollars because of its reserve currency status and the comparison is against a US market index. Yardeni knows what he’s doing.
This just demonstrates that fake money generates fake asset prices.
Can someone explain this please? Banks are seeing their assets take a dump? What assets in particular?
@GNL
The chart plots total assets of all (major) central banks vs. the SP500 index. It is not a case of “banks seeing their assets take a dump”. Rather it shows that when central banks increase their assets, i.e. mainly by buying government bonds but also other investment grade assets, the SP500 goes up. And when they reduce their assets the SP500 goes down.
When central banks buy assets they are undertaking quantitative easing “QE” and that pumps liquidity (money) into the economy. When they sell their assets they are undertaking quantitative tightening “QT” and that removes liquidity (money) from the economy.
The correlation between central bank assets and the SP500 is extremely high and although correlation does not equal causation one cannot help but draw the conclusion that when central banks increase liquidity that the money finds its way into the investment markets. And since late 2021 they have been withdrawing that liquidity and increasing interest rates. Markets coming down, hard.
And yet I wonder, why does anyone question the NEED to charge, incarcerate and try all banksters???
“Give me control of a nation’s money, and I care not who makes it’s laws…” Mayer Amschel Rothschild
But that’s just a conspiracy theory about jews controlling the world.
Gaslighting isn’t real. YOU’RE JUST CRAZY.