What have central banks bought?

Central banks have implemented various stimulus programs in recent years to stimulate the economy and lower interest rates. But what have they put on their balance sheet over the years? Oxford Economics made an overview of all central bank purchases and ranked them by category. As expected, central banks mainly bought government bonds, but also other assets.

For example, the Federal Reserve's bond-buying program consisted of 40% mortgage loans, while the central banks of the Eurozone, the United Kingdom and Japan also lent heavily to banks. Japan's central bank has also bought Japanese stocks over the years to support the stock market.

Most notable is the Swiss central bank. They did not buy government bonds and corporate loans in their own currency, but rather assets in foreign currency. In this way, the central bank tries to control the appreciation of the currency. The Swiss franc is seen as a safe haven, much to the dismay of companies based in that country. Due to the expensive currency, their export position is deteriorating, a situation that the central bank is trying to combat by buying foreign currency.

The chart below shows how central banks have inflated their balance sheets to save the economy. We can conclude that they have mainly financed the debts of governments. Admittedly not directly, but indirectly through the secondary market.

Monetary endgame is on. The cbs are desperate to keep the wheel spinning. Soon they will own everything. You need to own a hedge in form of #gold #bitcoin @DiMartinoBooth @Renegade_Inc @HenrikZeberg @crushthemarket @BitcoinEcon @franke_media @RaoulGMI @GuntherSchnabl @wmiddelkoop pic.twitter.com/i2uLtAus8k

— Marc Friedrich (@marcfriedrich7) October 14, 2019