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Federal Reserve and other central banks own close to half of all stock markets

Global Stock Market Capitalization
Global Stock Market Capitalization
Courtesy of

In a new study set to be released next week, the Official Monetary and Financial Institutions Forum (OMFIF) reports that central banks, including the Federal Reserve, account for more than $29 trillion in investments in equity markets around the world. As the global market capitalization of all stock markets was $54.57 trillion as December 2012, this means that the central banks have not only pumped up and inflated equity markets through their myriad of Quantitative Easing programs, but these private entities now own close to, or more than, half of all stocks in the entire world.

Central banks around the world, including China’s, have shifted decisively into investing in equities as low interest rates have hit their revenues, according to a global study of 400 public sector institutions.

“A cluster of central banking investors has become major players on world equity markets,” says a report to be published this week by the Official Monetary and Financial Institutions Forum (Omfif), a central bank research and advisory group. The trend “could potentially contribute to overheated asset prices”, it warns.

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

For years, small voices within the investment community, as well as big organizations like GATA, have been talking about market manipulation, and the central bank's pumping up of stocks outside of normal market trading. This has led to an artificially high stock market, and an over-analysis of the real value of tradable equities.

With this new confirmation, it is apparent that retail investors have remained outside of the current bull market, and it has primarily been central bank investment, as well as influence, that have kept stocks and stock markets at all-time highs at a time when the general economy is in deep recession and negative growth. And with this new report coming out by the OMFIF showing that the Federal Reserve, ECB, Chinese Central Bank and a slew of other controlled institutions own up to, or more than, half of the equities in the global stock market, the question to ask is, are there any markets at all that are not manipulated bubbles, or a centrally controlled systems?

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