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Comment by spdy | Hacker News Reader

Look at the ECB they are buying stocks for quite some time now.

https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.h...

"The SNB (Swiss Nation bank) is the 35th largest investor, on average, across its top 50 holdings. In most securities, the only firms with larger investments are big asset managers like Blackrock and Vanguard, which hold investments for many individuals and institutions. That means that the SNB is the largest individual fund, bigger than any hedge fund." [1]

[1] https://qz.com/1140322/check-out-the-swiss-central-banks-ins...

and BOJ https://www3.boj.or.jp/market/en/menu_etf.htm

The scale of BOJ's ETF purchases is quite something.

A foreshadowing of all developed country central banks’ actions.

It’s only a matter of time before the Fed, BOE, and the ECB do so at similar scale.

Incredibly disappointing as an educated investor that you must be judicious about asset acquisitions and allocations, and yet central banks just make the money printer go brrrrr when they deem it necessary (something, somewhere is always “too big to fail”).

What would you prefer? 20% unemployment?

Anyway, central banks don't really do asset allocation -- they buy the least risky assets they can. Their real goal is to keep the currency from deflating.

Whoa there with the false equivalency. Helicopter money would be more helpful than propping up the wealth of the top wealth brackets using price floors through broad scale asset purchases. Literally give away hundreds of billions of dollars to citizens who will spend it right this minute. Have the government be economic demand of last resort to steady the ship until people can actually move about again. There will be no inflation to speak of due to how GDP has plummeted over the last few weeks.

Monetary velocity > asset price protection. The stock market isn’t the economy, people producing, consuming, and exchanging fiat in the process are.

What do you think helicopter money looks like? The Treasury borrows a bunch of money from the Fed, and then sends it out. The Fed ends up owning large amounts of Treasuries. The only difference is that the Fed isn't waiting for the Treasury. If the Treasury starts writing checks tomorrow, it's effectively helicopter money.

> The stock market isn’t the economy, people producing, consuming, and exchanging fiat in the process are.

You might get tarred-and-feathered if you keep speaking like that. Be careful ;)

Judge me by the enemies I’ve made.

This.

Can someone with some financial background refute this? Why is buying assets a better idea? In concrete, non-abstract, non-hand-wavey, laymen terms, how is it going to make the Average Joe get through this crisis? How is it going to help him pay for his rent/food/etc in the next 2-3 months, and potentially longer when he possibly will have no job?

Legally, the Fed can't do that. Only the government can. Anyway, the Fed is mostly buying government debt or government-guaranteed debt. By buying up the existing debt, this creates space for the government to borrow and spend on supporting Average Joe.

Alternatively, the Treasury could print money and mail it out to Average Joe. But then there's no way for the Fed take the money out of circulation if we get inflation.

I'd rather see the government become employer of last resort, than investor of last resort. With some kind of 30 hrs of work and 10 hrs of skills/education training. And a couple hours week of mental health/addiction services optionally. With some kind of medical and other benefits.

I believe the issue with the gov being the employer of last resort is that you end-up with a fat, inefficient government. What politician will dare to fire all the redundant workers once that crisis is over? You can see this issue in ex-communist states.

https://en.wikipedia.org/wiki/New_Deal

We’ve done it before, and it worked. So much so that they instituted presidential term limits, as FDR served four terms he was so popular.

Why fire people? wouldn't companies be able to lure workers away from the government with better pay and benefits? The government could offer some kind of incentive to companies where the government pays the person for some length of time and they work for a private company for free as long as the companies keeps that person on for 1 year or something like that.

That doesn't really happen in the real world. People are reluctant to change jobs. Especially if they need to support families. They would rather vote for the guy who promises them higher wages and fat pensions rather than to vote for the guy who promises incentives to work (again) in the private sector(and then risk the insecurity being fired<again>). Once you hire in the public sector is really hard to get rid of them.

I find it funny that while I am actual economist, whenever I comment on my actual area of expertise, I get voted down. Random topics where I know nothing, I get upvoted. Actual expertise, voted down.

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