Financial markets are increasingly looking like “bubbles,” but the most curious “bubble” is not a stock or a financial asset at all, but the central bank of one of the countries.
We live in a world of bubbles that constantly inflate in the financial system. Only their scope and growth rates differ, and, of course, the information background with which this whole thing is accompanied.
The technology bubble has been inflating for many years, but in March there were events that frightened off investors. This is the exposure of Facebook, and other events. You can recall the situation with Tesla, whose financial situation raises many questions.
In general, technological stocks have lost a significant share of capitalization over the past month.
Another “bubble”, quite young, is cryptocurrencies. In fact, he began to inflate only last year, but with what noise and with what scope. However, already this year the trend unfolded, the cost of major cryptocurrencies fell by about 65-75%. We can say that this “bubble” has already burst, although perhaps another wave is waiting for us. But while quotes are falling rapidly.
By the way, this year almost all stock assets are not feeling too well, even the most popular FANG stocks are getting cheaper.
But all this is trifles compared to the main “bubble” – the National Bank of Switzerland. While the remaining “bubbles” are blown away, this one continues to increase.
The Swiss Central Bank earned 32 times more money than 85 Swiss banks. Moreover, the NBS owns US stocks worth more than $ 100 billion.
In other words, the Central Bank owns a huge number of shares of US companies in US dollars on behalf of each resident of the country. Simply put, the regulator took the liberty of investing money not in the public debt of some countries or even in corporate bonds, but in the most high-risk market segment – stocks. On average, it turns out that $ 11,589 is invested per person.
Most curious, few people know about it, but the Swiss National Bank is not only the central bank: its shares are traded on the stock market. Since the beginning of the year, their value has soared by 93%. It’s hard to imagine, but it is.
In March, when there was a fall in almost all markets, investors invested in the securities of the National Bank of Switzerland, considering them a safe haven asset.
Of course, all this seems to be some kind of absurdity. The absurdity that created the central banks. By the way, if you imagine that the Federal Reserve System also decides to invest in the American stock market and spend also $ 11,589 per person, then it will have to buy shares for $ 3.75 trillion, that is, practically double its balance sheet account.