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.
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.
Indeed, only higher income brackets ever liked the Fed’s “wealth effect” policies.