The central banks (The Fed, the ECB etc.) have officially passed the point of no return. So far this year central banks have purchased $1 trillion in assets and carry those assets on their balance sheets. That is an annualized rate of $3.6 trillion so far this year.
Collectively, the central banks now carry $14trillion+ worth of assets on their books. In 2007 the central banks had approximately $3.5 trillion on their books and since then they’ve had to add increasingly more assets year after year in order to avoid a downturn in the worlds financial markets…..
Refer to this chart:
At this point, the central banks are buying everything from prime number one stocks to “junk debt” to get it off the banks books. Why are they doing this?
The answer is simple, to keep the World financial markets from collapsing.
To summarize, central banks exist to create inflation by printing Fiat money and extending credit. The predicament that the Fiat money system has created is one we are by the central banks now have to buy assets to keep the economy going and interest rates low to avoid a downturn resulting in the defaults on the debt. The problem with this is that there’s no one to buy these “assets” from the central banks so just keep buying more and more of them just to sustain the status quo.
Like any Ponzi scheme the problem is that ultimately someone is left holding the bag and in this case it’s the central banks.