Gone are the days when central bankers act as invisible hands, which nudge economies back toward states of equilibrium as needed.
Since the Great Recession first sent shock waves that still echo today throughout the global economy, central bankers have taken centre stage. They now use their mighty (and bloated) balance sheets to purchase huge quantities of not just bonds, but also stocks. Central bankers now set the price for so many asset classes, either directly through outright purchases or indirectly through interventionist monetary policies, that these days, they are effectively the only game in town.
Did you know that the U.S. Federal Reserve, the Bank of Japan and the Bank of China have purchased 90 percent of all new U.S. Treasuries issued so far this year?