September 2018 - Bubbles and Bottoms for Governments -

As I said earlier in this newsletter, the FED is currently the only central bank out of the three largest central banks that is tightening their fiscal policies, which can be clearly seen in the chart below. It shows the bond holdings as a share of GDP by each of these central banks and clearly indicates that the FED is on its way out, while the ECB and BOJ are steadily buying up every bond they can find. The BOJ has now practically reached a level of asset holdings that is equal to its GDP!

Where does all this money go to, you might wonder. Much of it has ended up in the pockets of 1% of the population, who now hold a combined amount of wealth that is higher than the entire world GDP.

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