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Posts Tagged ‘Debt-Based Currency’

Financial Crisis

A prudent man foresees evil and hides himself, but the simple pass on and are punished.

    Proverbs 22:3

It was back in August that we began our look at the ongoing 2008 financial crisis. The immediate occasion for my writing on this topic was the sudden plunge in the US stock indices following the Federal Reserve’s decision to raise interest rates in late July. The market sold off hard, but managed to stabilize, or more accurately, was stabilized by the powers that be after a phone call by President Trump with three major bank CEO’s.

This was a similar situation to what happened around the end of the year in 2018. On December 23, the day before the Dow and S&P indices had their largest ever declines on Christmas Eve, Treasury Secretary Steve Mnuchin placed individual calls to America’s six largest banks – Brian Moynihan, Bank of America; Michael Corbat, Citi; David Solomon, Goldman Sachs; Jamie Dimon, JP Morgan Chase; James Gorman, Morgan Stanley; Tim Sloan, Wells Fargo. When the market re-opened after the Christmas break on December 26, the Dow closed up 1,086.25 points, the largest single day gain in the history of the index. This huge day was after a terrible December and in the absence of any news that would have caused a market surge.

Was there a relationship between Mnuchin’s call on December 23 and the blast off in the stock market three days later? While this can’t be formally proven, in the opinion of this author it is the most likely explanation. In short, I think that Mnuchin told these CEO’s to buy the market and that they obliged.

If my understanding is correct, this means that at least twice in the period of eight months orders came down from on high to rescue the stock markets. What, I would ask you, does this say about the state of our financial system? What are we to think of a system that requires this level of manipulation to keep from crashing?

Of course, calls from Trump and Mnuchin are not the only sort of manipulation in the financial system. In the short time that I’ve been writing this series, we’ve seen additional extraordinary measures taken by the Fed to prop up the system.

First there was the bailout of the overnight Repo market. Originally, this was to be for a few days in September. Next, they extended it to a couple weeks. Then it got pushed out to the second week of November, then it was January 2020. Just last week, Fed President James Bullard expressed his preference for a “standing repo facility.” By this he seems to mean that he wants the current repo market intervention by the Fed to become a permanent policy tool of the central bank.

And that’s not all. Last week on Wednesday, the Fed started QE4. With this latest iteration of what in 2008 was termed an “emergency policy,” the Fed will by purchasing $60 billion a month in T-Bill (T-Bills are short-term US Treasury debt instruments). Where, you ask, does the Fed get the $60 billion per month to conduct QE4? They get it by a process that, were you or I to try it, we’d be arrested. In short, they counterfeit it out of thin air.

Here’s another question you may want to ask yourself. If the economy is doing so great as we’re constantly being told by the mainstream financial press, why is the Fed running simultaneous bailouts of both the overnight repo market and the bond market, both of which are designed to prop up the stock market? The obvious answer is that, far from being the greatest economy ever, the US, and indeed the world’s, financial markets are a mess and getting messier by the day. All the hype you hear about how great the economy is doing is propaganda designed to keep you locked into the system for the benefit of those who run it.

In light of the enormous lies that are being told to the American people by government officials, by bankers, and by the press, in the opinion of this author it is imperative that God’s people hear the truth about the financial state of the country and some sound advice about how to take measures to protect themselves financially. That is the purpose of this week’s installment.

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