Friday, April 26, 2013

Central Bankers: "We have 7 Trillion and we are buying equities on the open market"…why tell us now?

Apparently, our central banker community has either taught GoldmanTAX its practices or studied those of Lloyd BlankCHECK in close detail. Why would any central bank, as a money creation entity mandated to be the supposed ultimate risk adverse goto financial anchor and facilitator of their currency, let alone a group of them, publicly admit to its hedgefund operations and surreptitious and direct buying of equities? I have often indicated on these pages that such non-disclosed activities are creating virtual hedgefunds out of our central banks…and they are not exempt from margin calls. So, covert purchases of assets are now OVERt ones. I think we need to turn to a page in the GS playbook, issue a “buy" report and “sell” as much as you can to anyone who believes it. It certainly strikes me as funny that the central bankers would now suddenly want to turn an altruistic and genuine face now…

They are most certainly NOT, altruistic, genuine or sanguine. An admission of direct buying in clearly non-disclosed accounts of highly risky securities is not reassuring at all to the public for a custodian of a currency and its financial institutions. This admission now, is rather odd timing right as the pressure on Central Bank QE is ratcheting up significantly. To put this in perspective, these non-disclosed account purchases are not all that different from a married pastor being involved in an affair but not getting caught. Then to attempt to soften the fallout of his lapses or imminent discovery, renders a PUBLIC admission (as the Central Banks have just done) to simply purchasing sexual favors. In fact, the sad reality is the married pastor’s likely has an unfavorable discovery to be found upon closer investigation - as they always do. Perhaps it could be discovered that the said favors were in fact drug fueled orgies with cross dressers and assorted other oddities. Central Banks purchasing debt in bankrupt entities and other outright high risk securities is not that different from such a dereliction of integrity as our gluttonous pastor…it is veritable sacrilege and likely to spread disease.

So, why do central banks admit to their affair now? I would think that the answer to that question represents a classic pump and dump and perhaps perfect for the stragglers who will want to believe that a gratuitous  open admission - and one that amounts to an one that occurs at the end of party.

Central bankers admit to an affair…but what is under the covers

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