Bank Of Japan’s ETF Holdings Surge 80% To Cartoonish 16,000,000,000,000 Yen

[Tsing Tao]

And do consumers not pay for a share of stock? Is it magically free in Japan?

What's the opposition to CBs taking a role in financial markets now?

Like I said, next.

You can say "next" all you want and it doesn't mean you've made any point whatsoever. Just sayin'.

The price consumers pay for goods and services has nothing to do with the price of financial assets insofar as Central Bank mandates are concerned. I'd advise you to read up a bit on the subject.

As for the opposition to central banks taking a role in financial markets, they have always been in financial markets to some degree or another. But directly buying stocks? That's a new development.

 

[jj90]

You can say "next" all you want and it doesn't mean you've made any point whatsoever. Just sayin'.

The price consumers pay for goods and services has nothing to do with the price of financial assets insofar as Central Bank mandates are concerned. I'd advise you to read up a bit on the subject.

As for the opposition to central banks taking a role in financial markets, they have always been in financial markets to some degree or another. But directly buying stocks? That's a new development.

What if financial assets are now considered in the realm of goods and services? @Tsing Tao I wasn't aware you were the Governor of the BOJ and were telling us otherwise.

And you presume new developments in CB roles and mandates are inherently bad? Prove it.

 

[Martinghoul]

How about not pegging to the euro? How about lowering rates until deposits are charged such negative rates that no one wants to hold Swiss francs for more than 30 seconds?

They've tried it all in the 70s already.

That experience demonstrated that an extremely negative rate policy (even when applied selectively and with some care) was not particularly effective in preventing sharp further appreciation of the Swiss franc. There are all sorts of reasons to believe that it would be even less effective now. This is what eventually led the SNB to adopt a DEMCHF floor in 1978. Furthermore, the "collateral damage" costs of adopting very negative rates would be even higher today, for a variety of reasons.

Ultimately, the SNB really has no choice. Given this, I don't really see how they have any real choice in the matter where their equity purchases are concerned.

 

[Tsing Tao]

What if financial assets are now considered in the realm of goods and services? @Tsing Tao I wasn't aware you were the Governor of the BOJ and were telling us otherwise.

Are they included in the calculation of CPI? Of course they aren't.

And you presume new developments in CB roles and mandates are inherently bad? Prove it.

I'm not saying they are bad necessarily, but that they are against their mandates.

Prove how it is a good thing, as you obviously believe it is.

 

[Tsing Tao]

They've tried it all in the 70s already.

That experience demonstrated that an extremely negative rate policy (even when applied selectively and with some care) was not particularly effective in preventing sharp further appreciation of the Swiss franc. There are all sorts of reasons to believe that it would be even less effective now. This is what eventually led the SNB to adopt a DEMCHF floor in 1978. Furthermore, the "collateral damage" costs of adopting very negative rates would be even higher today, for a variety of reasons.

Ultimately, the SNB really has no choice. Given this, I don't really see how they have any real choice in the matter where their equity purchases are concerned.

Not sure I agree with how it would be worse this time around, but since there's no way to disprove a negative, so to speak...

So equities are the only choice? Really?

 

[jj90]

Prove how it is a good thing, as you obviously believe it is.

I'm not aware if financial assets are currently included in the CPI in Japan. Do you know what goes into Japanese CPI calcs? Educate us then.

What research have you done that Japan isn't including it or won't intend to in the future?

Mandates and talk are 1 thing, actions are another. Perhaps you missed that point.

As you postulated the OP, onus is on you brother......

 

[Martinghoul]

Not sure I agree with how it would be worse this time around, but since there's no way to disprove a negative, so to speak...

So equities are the only choice? Really?

You're correct, there is no way to prove anything conclusively. That said, they studied their 1970s experience and concluded, rightly or wrongly, that they didn't want to go through a similar experience.

As to what else they can buy, they already own pretty much all the "safe" foreign bonds they can buy (and they have caused all sorts of issues in European bond markets). They also own a sh1tload of gold (1040 tons). Assuming they want a reasonably diversified but simple portfolio, there's just nothing else they can do. In fact, it's easier to think of a large chunk of SNB FX reserves as a sovereign wealth fund within a central bank, similar to what Norway has.

 

[Tsing Tao]

I'm not aware if financial assets are currently included in the CPI in Japan. Do you know what goes into Japanese CPI calcs? Educate us then.

It is made up of a basket of goods and services that consumers purchase in everyday life. It does not include financial assets (stocks and the like). Consider yourself educated.

What research have you done that Japan isn't including it or won't intend to in the future?

Go look it up. As for the future, please give me a break.

Mandates and talk are 1 thing, actions are another. Perhaps you missed that point.

As you postulated the OP, onus is on you brother......

Onus for what? All you're doing is typing to see your own text at this point. Go waste someone else's time, please.

 

[Tsing Tao]

You're correct, there is no way to prove anything conclusively. That said, they studied their 1970s experience and concluded, rightly or wrongly, that they didn't want to go through a similar experience.

As to what else they can buy, they already own pretty much all the "safe" foreign bonds they can buy (and they have caused all sorts of issues in European bond markets). They also own a sh1tload of gold (1040 tons). Assuming they want a reasonably diversified but simple portfolio, there's just nothing else they can do. In fact, it's easier to think of a large chunk of SNB FX reserves as a sovereign wealth fund within a central bank, similar to what Norway has.

So what's the endgame? They just keep expanding and expanding their balance sheet until...? Until it's 10 times the size of the US? 20? 100? Assume financial situations return to normal (whatever normal is). Do they unwind at that point? What is the effect of such an unwind?

You think this is all normal and no big deal, right?

 

[jj90]

Onus for what? All you're doing is typing to see your own text at this point. Go waste someone else's time, please.

You said the below and I quote:

I'm not saying they are bad necessarily, but that they are against their mandates.

So prove it. You make a claim that the BOJ has overstepped their mandate, yet offer no evidence that the BOJ's definition hasn't changed or that they even care at this point.

And funny you dismiss my point about the future yet you make a forecast of the "endgame", which IS a point about the future.

Telling people to "look it up" without offering any proof is the pedantic(you'll have to google this) way of saying "I've lost".
Thanks, come again. @Tsing Tao stick to the politics forum.