by William Skink
While many of you are still stuck in a normalcy bias mindset that considers party politics as a thing that still exists, the Federal Reserve is moving to nationalize markets.
What the Fed announced yesterday should make every citizen enraged. There is no such thing at the top as failing, as going bankrupt, as experiencing the supposed reality of a supposed “free market”.
If free markets existed for big banks and corporations, and a crisis caught them with their over-leveraged debt pants down, they would go kaput.
But that is not what is happening, not when you have the Fed willing to buy corporate junk bonds:
The central bank astounded markets on Thursday when it announced an historic move to buy risky corporate debt as part of a larger $2.3 trillion rescue package for businesses and municipalities hit hardest by the coronavirus pandemic. Just two weeks ago, the Fed drew a line in its whatever-it-takes playbook, saying it would only consider the purchase of investment-grade corporate debt as part of any efforts to pump liquidity into the credit markets.
Under the newly expanded Fed program, the Fed will now buy what many pension funds will not: speculative grade corporate bonds. Junk.
It’s difficult to find the words to explain why this is so significant, and of course our corporate media isn’t going to put this mind-numbing bailout into the insane context it deserves.
on Twitter Michael Krieger put out a link to a post from Wall Street on Parade, a citizens guide to Wall Street. Here’s an excerpt:
For the first time in the history of the Federal Reserve, it has signed on to a plan with Congress to nationalize the unmanageable debts of global banks and other multinational corporations and put the U.S. taxpayer on the hook for the losses. Conducting the bulk of these programs will be the Federal Reserve Bank of New York, known as the New York Fed, which is a private institution owned by (wait for it) multinational banks.
Because the New York Fed is owned by multinational banks and is allowed to create trillions of dollars out of thin air to conduct bailouts of global banks and multinational corporations since it created this precedent in 2008, it is effectively functioning as a multinational central bank with the Federal Reserve in Washington, D.C. and Fed Chairman Jerome Powell little more than titular props for what’s really going on.
What is happening now is an extreme continuation of the precedent set over a decade ago. It’s important to note the Fed is privately owned, and it’s reckless behavior is aided and abetted by both political parties. Here’s more:
According to the language in the recent stimulus bill (CARES Act) passed by Congress and signed into law by President Trump, together with an interview Fed Chairman Jerome Powell gave to the Today show on March 26, the nationalization of bad debts will work like this: the U.S. Treasury will hand $454 billion of taxpayers’ money to the Federal Reserve. The Fed will, in turn, hand the bulk of this money to the New York Fed. The New York Fed will then create Special Purpose Vehicles (SPVs) using the $454 billion as loss absorbing capital (equity) to leverage its purchases of bad debts to $4.54 trillion. Ostensibly, if debt markets keep sinking and the New York Fed needs to buy up more bad debts from the global banks and multinational corporations, Congress and the U.S. Treasury will put the U.S. into ever deeper debt to oblige our multinational overlords. (Before the last financial crisis, U.S. national debt stood at $11 trillion. It has more than doubled in a dozen years to the current $24 trillion. Much of that growth resulted from fiscal stimulus measures to shore up the U.S. economy that multinational banks on Wall Street destroyed in 2008.)
If you can read that and not come away completely enraged, I don’t know what’s wrong with you. Just go line up for your food rations and vaccine id card right now, because you are already their cattle and should therefore act accordingly.
With a pandemic raging and draconian orders to shelter in place keeping the populace scared and isolated, citizens can’t take to the streets to protest the biggest taxpayer heist in human history.
But that is what is happening RIGHT NOW, the biggest taxpayer heist in human history, so when you can’t pay your rent or mortgage, think about this financial rape by Wall Street.
It will be important to understand what level of assistance the Federal government is planning to provide to you and/or your business, especially as groups like the Montana Landlords Association prepare to sue the state of Montana for ordering them to stop evicting people during this crisis.
The argument the Landlords Association is going to make in court is that the Federal government is providing adequate assistance, so there is no need to stop evicting people. From the link:
The Montana Landlord Association argues that provisions contained in federal relief bills and expanded unemployment give renters and homeowners adequate assistance to pay their rent or mortgage. The governor’s order rather than helping renters just hurts landlords, they argue.
Also, the benevolent landlords also want y’all to know how empathetic they are being right now:
The Montana Landlord Association letter stressed that landlords have also worked to help their tenants.
“To the extent their resources allow, landlords in Montana have been empathetic partners in helping individuals and families through the challenges presented by this unique situation,” the letter stated.
Let me again restate what is happening here: the unique situation we find ourselves in is that sociopathic institutions are exploiting a pandemic health crisis to save themselves from experiencing the consequences of their reckless greed, and while they are parasitically feeding on the beleaguered taxpayer, we’ll be left fighting each other for the crumbs.
If we let them getaway with this we will forever be indebted slaves to sociopaths and the institutions they use to wage class warfare on us.
Is this the future you see for yourself and your loved ones?