Central banks – including the Bank of Japan, Bank of Israel, Bank of Switzerland and the Czech Republic– have been buying stocks to prop up their nations’ stock markets.
We’ve noted for years that Fed policy is aimed at boosting stocks, as well.
Today, the decade-long former president of the Federal Reserve Bank of Dallas – a voting member of the the Fed’s principal monetary policymaking group (the Federal Open Market Committee) – admitted (full interview):
What The Fed did, and I was part of it, was front-loaded an enormous rally starting in 2009 … in order to create a wealth effect…
I wouldn’t blame [the declining stock market] on China.
An uncomfortable digestive period is likely now.