For many people, spending forty-one dollars a day is a considerable expense that can result in going broke fast. However, according to Bloomberg in a story reported by Yahoo! News, the Federal Reserve Bank is purchasing $41 billion in assets each day.
Central-bank balance sheets are expanding to record levels amid their latest buying spree, raising questions about how big they can get and whether those assets can ever be sold back to markets.
Policy makers didn’t have much luck paring down much smaller portfolios in the decade since the financial crisis. And now they have to bankroll a coronavirus economy that’s putting government budgets under unprecedented strain and threatening to drive companies everywhere out of business.
“The amounts being purchased are enormous, and it just tells you how much support is needed when the economy is closed down,” said Torsten Slok, Deutsche Bank’s chief economist. “Just have a look at how long it took to unwind from the financial crisis of 2008 and 2009. Now we are adding at a pace that is multiples faster.”
Central banks in Group of Seven countries purchased $1.4 trillion of financial assets in March, nearly five times as much as the previous monthly record set in April 2009, according to a Bloomberg Economics analysis. Morgan Stanley analysts estimate that the Federal Reserve, European Central Bank, Bank of Japan and Bank of England will expand their balance sheets by a cumulative $6.8 trillion when all is said and done.
The Fed has led the charge, offering to buy unlimited amounts of U.S. government bonds and mortgage-backed securities — and lend trillions more to corporations and municipalities through temporary purchases of their obligations — as global investors seek to unwind years worth of accumulated leverage in their own portfolios. In the week through April 15, it expanded its balance sheet at a pace of about $41 billion per day. (source)
The US does not have an economy or stock market any more. Many traders have acknowledged this. While price controls and socialist-style market manipulation has existed for a long time, it is open now for all to see. There are no attempts being made to hide it.
The largest owner of US corporations is going to be the Federal Reserve Bank, for as they continue to purchase corporate debt, as they hold their obligations, the companies are now beholden to the bank.
People have wondered how fascism might come to the US, and many make bold pledged while waving their guns saying how they will “defend America”. Yet fascism just came to the US and people did nothing when it came except to say “Where is my COVID-19 check from the IRS?”
Mussolini would have been jealous, as fascism in the US took over without a single shot or bloodshed.