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FX MONETARY POLICIES


increasingly nationalizing the equity capital markets.” At least they would be nationalizing equities, if they were actually “national” central banks. But the Swiss National Bank, the biggest single player in this game, is 48% privately owned; and most central banks have declared their independence from


their


g ove r nment s . Tey march to the drums not of government but of big international banks.


Marking the 10th anniversary of the 2008 collapse, former Fed chairman Ben Bernanke and former Treasury sec r e t a r i e s Ti mo t h y Geithner and Henry Paulson wrote in a September 7 New York Times op-ed that the Fed’s tools needed to be broadened to allow it to fight the next anticipated economic crisis, including allowing it to prop up the stock market by buying individual stocks. To investors, propping up the stock market may seem like a good thing; but what happens when the central banks decide to sell? Te Fed’s massive $4 trillion economic support is now being taken away, and other central banks are expected to follow. Teir US and global holdings are so large that their withdrawal from the market could trigger another global


recession. Tat means when and how the economy will collapse is now in the hands of central bankers.


Moving Goal Posts


Te two most aggressive central bank players in the equity markets


value of the national currency, making it hard for Swiss companies to compete in international trade. Te SNB does this by buying up other currencies, and it needs to put them somewhere, so it is putting the money in stocks.


Tat is a reasonable explanation for the SNB’s actions, but some critics suspect other motives. Switzerland is home to the Bank for International Settlements, the “central bankers’ bank” in Basel, where central bankers


meet


The Swiss National Bank, the biggest single player in this game, is 48% privately owned


are the Swiss National Bank and the Bank of Japan. Te goal of the Bank of Japan, which now owns 75% of Japanese exchange-traded funds, is evidently to stimulate growth and defy longstanding expectations of deflation. But the Swiss National Bank is acting more like a hedge fund, snatching up individual stocks because “that is where the money is.” About 20% of the SNB’s reserves are in equities, and more than half of that is in US equities. Te SNB’s goal is said to be to counteract the global demand for Swiss francs, which has been driving up the


12 FX TRADER MAGAZINE October - December 2018


regularly behind closed doors. Dr. Carroll Quigley, a Georgetown history professor who claimed to be the historian of the international bankers, wrote of this institution in


Tragedy and Hope in 1966:


"[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. Tis system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. Te apex of the system was to be the Bank for International


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