Financial and Government news
Dec 27, 2018
I wrote yesterday about the Plunge Protection Team, referenced publicly by Treasury Secretary Steve Mnuchin. Here is a short article about this, including Mnuchin’s full text.
As we saw, yesterday the Dow rose 1086 points as a result of Mnuchin’s public statement that the PPT will intervene to keep the market from plunging further.
It appears that Mnuchin timed his intervention to coincide with the end of the fourth quarter, when the “rebalancing” of pension funds would take place. A lot of pension funds have been invested in government bonds, which earn very little interest, and so this “rebalancing” means that the pension funds have switched a larger percentage of their investments out of bonds and into “equities” (stocks).
How much? The article below says $64 billion of pension money went into stocks in the past few days. No doubt they were encouraged to do so by the PPT’s backing of the stock market.
And no, we did not anticipate that President Trump would activate the Plunge Protection Team over the weekend: the good news in question was that as Wells Fargo calculated U.S. defined-benefit pensions fund would need to implement a "giant rebalancing out of bonds and into stocks" - in fact the biggest in history - with the bank estimating roughly $64 billion in equity purchases in the last trading days of the quarter and year, prompting the banks to ask if traders are about to make pension rebalancing "great" again.
The markets are down again today, so it is hard to say what the long-term effect will be. Is this downturn just profit-taking after yesterday’s huge rally? Or is the market going to continue its downward spiral?
I think that in the end, Trump is showing the public that he is doing all that he can within his power, but that that the Fed is working against the markets. I believe he is making a case for the nationalization of the Fed—something that should have been done from the beginning. We should never have given away the right to create money and loan it to the government at interest.
If Trump is truly working to give the government back to the people, as he has stated, the most important thing he could do would be to nationalize the Fed and give sovereignty back to the government of the people. Another matter would be to take back the departments of government, which were sold off as the government “downsized” (using Reagan as the excuse).
The various departments of government are now all mere corporations and are now under contract to do government work. They have even built a mercenary army (private army), and so we often heard of “contractors” fighting the war in Iraq or Afghanistan. They have not yet been able to privatize the armed forces as a whole, but they certainly find the “contractors” useful, as they can do what the regular armed forces are not allowed to do.
Privatization simply means that the government departments were sold to wealthy Babylonians of the Deep State. The collapse of Babylon means that these departments will come back under the control of the US government, which in turn is owned by the people themselves.