The acquisition of equities by central banks, government pension funds and sovereign wealth funds amounts to enormous power to sway markets the state’s way; all that’s required is a bit of inter-departmental cooperation and $29 trillion (and rising) can be fully utilized to this end.
This intervention could increase until governments end up as significant shareholders in most major companies. Norway’s Government Pension fund alone is buying 5% of every major listed European company.
So do not under-estimate the potential scope for further government intervention. Politicians and crony-capitalists will relish this new state-sponsored capitalism, which promises to tame bear markets and enhance share options. Unfortunately such idealist thinking is in defiance of economic reality with all the eventual consequences that entails.