I brought up this article specifically on SNB buying US stocks that was speculated by some on The Feds doing the same thing. I imagine the SNB operates in a different way to The Feds in that profits are shared through a dividend with the Sovereign Govt of Switzerland through the various cantons. I have never delved into how SNB operates and rely on "experts" to analyze that eventually their asset buying will reflect in the Bal Sheets. I don't recall from the past the Feds operates along the same manner but aid the US equities market in a different way. QE, rate cuts, buying long term bonds to artificially cap yields. etc.
I used to think that eventually Feds will give up on this effort and the markets will crash. I am not so sure these days using the Japanese situation as a precedent, 2 decades of deflation and debt -gdp ratio of over 2 with no sign of a melt down despite persistent QE attempts and a very large public debt pile. It is business as usual in Japan and any sign of global stress will still attract Yen as one of the safe havens along the same sentiment as USD.
It is fruitless trying to guess on the time and price level that US equities or USD will crash. This only creates miss opportunities to risk exposure in stocks. Folks here this time last year were talking Shemitah, US equities top crashes and all the doom scenarios. In fact US equities as I suspected back then would have a greater chance of breakout as we are witnessing.
Artificial yield chasing has become a reality that is gathering momentum out of a necessity. Ever wondered why AUDUSD/NZDUSD are so strong when in reality we are reverting to the economic mean with out global peers? We can also use the argument that holding gold now is so 'cheap' relatively speaking when the USD swap rates are near Zero in the same way the US bond yields are at recessionary levels.
The GFC experience have made the survivors even shaper this time around and constantly not taking markets for granted like the past. The monetary system has changed since GFC and unconventional tools are now the 'normal' way of tackling the problem. If the deflationary pressures continue, I would not be surprise if negative rates and banks paying mortgage holders to take up loans are the new unconventional tools. We had a taste of helicopter money from K Rudd's senior gifting at the deep end of the GFC crisis and I would not be surprise IF the CBs' gets desperate they would enact such policy measures.
Don't bet against the Feds but leave a big portion in cash just in case we have a melt down ans presents buying opportunities.
