NEW YORK (TheStreet) -- Ironic. Let me explain.
There's a bit of grumbling going on about Janet Yellen and her comments yesterday about stock prices being "quite high." Jim Cramer even went so far as to suggest Yellen keep her stock opinions to herself.
While it's worth pointing out just why her statements were not worthwhile (and we'll get to that a bit later on), what needs to be pointed out is the extreme irony of a central banker talking about high stock valuations. When it comes to U.S. equities, the Federal Reserve helped create the high valuations.
And that's just the tip of the iceberg.
A 2014 report by the Official Monetary and Financial Institutions Forum claims that central banks around the world -- including the Fed itself -- own close to half of all global equities. The report is available in hard copy at the OMFIF website for £100 ($153).
The Fed isn't the only central bank buying stocks around the world. The Swiss National Bank, for example, is open about holding 18% of its balance sheet in foreign equities. In fact, in its public filings with the SEC, it lists an astonishing $1.1 billion stake in Apple (AAPL), $627 million stake in Exxon Mobil (XOM), $513 million in Johnson & Johnson (JNJ), and $508 million in Microsoft (MSFT). The SNB owns a total of 2,548 companies all the way down to micro-caps like Resolute Energy Corp. (REN), which it graced with a $34,000 investment.
And where do central banks get the money to sink into equities? They print it. And it goes into the stock market. Much of the quantitative easing the Federal Reserve engaged in through the Great Recession and after has helped inflate equities prices. And then the head of that organization warns of high prices -- irony of ironies!
Beyond that, Yellen and other supposed experts have been terrible at predicting the market.