The actual title of this article is “Are Central Banks Nationalizing The Economy?” but hopefully people can distinguish between nationalization (public ownership) and monopolization.
The FT recently ran an article that states that “leading central banks now own a fifth of their governments’ total debt.”
The figures are staggering.
- Without any recession or crisis, major central banks are purchasing more than $200 billion a month in government and private debt, led by the ECB and the Bank of Japan.
- The Federal Reserve owns more than 14% of the US total public debt.
- The ECB and BOJ balance sheets exceed 35% and 70% of their GDP.
- The Bank of Japan is now a top 10 shareholder in 90% of the Nikkei.
- The ECB owns 9.2% of the European corporate bond market and more than 10% of the main European countries’ total sovereign debt.
- The Bank of England owns between 25% and 30% of the UK’s sovereign debt.
A recent report by Nick Smith, an analyst at CLSA, warns of what he calls ”the nationalization of the secondary market.”
The Bank of Japan, with its ultra-expansionary policy, which only expands its balance sheet, is on course to become the largest shareholder of the Nikkei 225’s largest companies. In fact, the Japanese central bank already accounts for 60% of the ETFs market (Exchange traded funds) in Japan….