by Pater Tenebrarum, Acting-Man.com:
Central Banks Wade Into Stocks
Readers may recall that we have frequently remarked that the fact that central banks have reportedly become fairly large net buyers of gold over the past two years was at best irrelevant and at worst a contrary indicator. What it never was and never will be, is bullish. There is some hope that it may not be a big negative signal, due to the fact that the central banks doing the buying are not the same ones that sold between $250 and $600 and because they only buy fairly small amounts. However, it sure hasn’t been a positive signal so far. Central banks as a rule are the worst traders in the world.
It is therefore interesting that the latest central bank fad is apparently to buy stocks. They didn’t buy stocks in early 2009, mind. They probably had to wait for the markets to ‘look safe’ or something like that.
“Central banks, guardians of the world’s $11 trillion in foreign-exchange reserves, are buying stocks in record amounts as falling bond yields push even risk- averse investors toward equities.
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