By Arsenio Toledo
Central banks like the Federal Reserve and the European Central Bank (ECB) are going all out to save the stock market by going on bond buying sprees, even if this will lead to the destruction of the global economy.
“Central banks are willing to – and want to, quite obviously – wipe out and destroy the entire economy just so it can keep the stock market propped up,” said financial expert Gregory Mannarino of Traders Choice. “Central banks are willing to sacrifice the global economy by design. That’s what they want to do to issue in their new system, just to keep the stock market propped up.” (Related: “Take the tragedy in Sri Lanka and multiply by ten:” The Fed just lobbed a financial nuke that will obliterate the global economy.)
The ECB announced that it will soon unveil an unlimited bond-buying tool that will help market adjust as the central bank for the entire European Union begins raising interest rates higher and faster than what market analysts previously thought. ECB policymakers are currently considering raising interest rates by at least 50 basis points (0.5 percent).
According to the ECB, it will buy more of the country’s bond if its debt yields rise far too high. The scheme will use the bond-buying tool known as the Transmission Protection Mechanism, as well as proceeds from the ECB’s existing bond holdings.
According to 80 percent of economists surveyed by Bloomberg, the bond-buying tool will carry light conditions for governments that use it to help prop up their stock markets. Nearly all of the economists surveyed believe the liquidity created by purchases using the tool will be reabsorbed either back into national central banks or the ECB in a process known as sterilization.
“The Federal Reserve is going to follow suit, either overtly or covertly, they’re going to buy it all,” commented Mannarino. “That’s what’s been going on here for weeks, ever since the day that … I witnessed that sell-off in the debt market … the same day, the European Central Bank started to buy more debt. The Federal Reserve followed suit, and now we have this unlimited bond-buying program.”
Bond-buying plan also a way to prop up indebted governments
Economists everywhere believe this bond-buying tool will only lead to disaster. Francesco Canepa, in an analysis published by Reuters, noted that the plan was meant to support indebted countries in the Eurozone like Italy.
Canepa noted that the plan was unveiled in response to a sudden rise in yields across southern European countries and it was most acutely felt in Italy, where investors are pricing in on the country’s slower-than-expected economic growth and the impact of the coming higher interest rates. Investors are also weighing in on how this will impact Italy’s 2.5 trillion euro ($2.56 trillion) debt pile.
The ECB is also expected to buy bonds from other southern European countries like Spain, Portugal and Greece, all of whom have massive piles of government debt. The bonds will be purchased using proceeds the ECB receives from maturing German, French and Dutch debt, further providing proof that the ECB is just bankrolling indebted governments.
Learn about the state of the global economy at MarketCrash.news.
Watch this video from financial expert Gregory Mannarino of Traders Choice as he talks about the world’s major central banks being willing to sacrifice the global economy just to prop up stock markets.
This video is from the What Is Happening channel on Brighteon.com.