"Central Banks ARE the Market"
by Nomi Prins
"If there’s one lesson we’ve all learned lately is that the stock market is not the economy. After crashing in late February and March, the market has come storming back, largely because of unprecedented levels of support by the Fed. The Fed has pumped over $3 trillion into the financial system since the crisis began. And today the market isn’t that far away from its February highs.
Meanwhile, the economy is facing its most severe downturn since the Great Depression. Millions of Americans remain unemployed and many of their jobs may be permanently lost. Second-quarter GDP could contract 50%, or even more. The number will be released on July 30. Whatever it turns out to be, I guarantee it won’t be pretty.
Through the end of next year, the Congressional Budget Office (CBO) projects that Americans will buy up to $370 billion fewer goods each quarter than they would have bought if we never had the pandemic. Looking further out, CBO now estimates the economy will lose $8 trillion more over the next decade than it estimated only a few months ago. Moreover, it anticipates the economy might not completely recover until the next decade.
“Wall Street’s Going One Way, While Main Street’s Going the Other”: But if the stock market is supposed to discount the future, you’d think the market is looking at entirely different numbers. Wall Street’s going one way, while Main Street’s going the other. That’s hardly new, of course. That’s basically been the trend since the Great Financial Crisis. But today the gap between the stock market and economy seems greater than ever. And the big Wall Street banks are doing just fine. The New York-centric big banks make money out of volatility and central bank support while people and small businesses struggle.
In addition, from a dark money perspective, Federal Reserve Chairman Jerome Powell has made it clear that the Fed would not be raising rates for a very long time. Just don’t expect any of the money in the banking system to help Main Street. It didn’t last decade and that’s unlikely to change now. I actually addressed this problem to the Fed years ago…
Into the Belly of the Beast: A year after my book "Collusion" came out, I got an email. It was from the Fed. Every year, the Fed, the IMF and the World Bank have an annual internal conference. It’s where the most elite central bankers from around the globe gather. The Fed invited me to talk at the opening session. The session would take place in the very room in which the Fed convenes to set interest rates. I was in shock.
To say the least, I hadn’t written very nice things about the Fed’s policies since the financial crisis. In very public channels, I had criticized their cheap-money and quantitative-easing policies as subsidies to the private banks that had crashed the system. I had labeled their policies as rigging the markets and unhelpful to ordinary citizens and the Main Street economy.
I thought that the invitation might be a mistake. But I was assured they knew exactly who I was. In fact, they wanted me to address the topic of why Wall Street banks weren’t helping Main Street and looked forward to hearing my views.
A few months later, I was sitting in the front of a room with central bankers from around the world, listening to Fed Chair Janet Yellen proclaim that the worst of the crisis and its causes were behind us. When I got up to speak, the gloves came off.
Why the Big Wall Street Banks Don’t Help Main Street: The first thing I asked the distinguished crowd was, “Do you want to know why big Wall Street banks aren’t helping Main Street as much as they could?” The room was silent. I paused before answering for everyone, “Because you never required them to.” When a bank is offered a pile of cheap money in bailouts and loans for dangerous behavior with no major consequences, and no stipulation that they engage the real economy, then why should they? What would you expect?
Something more interesting happened after my talk, some of the people at the Fed — not at the top, but in the ranks, told me it made sense. Many thanked me. Central banks’ leadership, from Lebanon to Thailand, thanked me for making it clear that the entire monetary system was controlled more than ever by the major central banks, with the Fed leading the way.
I realized right then and there, that the zero interest rate policies prevailing in the U.S., Europe, and Japan were part of a coordinated effort. They were trying to render the cost of money cheap everywhere so that banks and other financial players could thrive. This is why I say the central banks are the market. Without them, the markets would be nowhere near today’s levels. I spoke with central bankers that gave me intel about how this collusion happened in practice and behind the scenes. That information was verified multiple times over.
Deep Collusion: What might surprise you is that after confirming these findings with both off-the-record and public sources — from different languages to local sources — is that very few had put it all together. Monetary policy strategy is often more collusive than government leaders might present on the surface.
When I met with a key central banker in Brazil, he left me shocked after revealing his analytic findings. He presented me with reams of information about just how far the collusion went. His analysis showed the high correlation between the level of markets and major central bank quantitative easing. Sometimes it happens behind the scenes in the financial markets and often goes on in plain sight.
The result of my research into this collusion revealed exactly how central bankers were rigging the world over the past decade. The major central bankers have worked together since the financial crisis to rig the markets, inflate asset bubbles, and coddle private banks under the guise of helping the real economy. That’s obviously continuing today, and has been greatly amplified by the pandemic. The upshot is this…
Central Banks Given Themselves a Blank Check: Central banks were given a blank check, by themselves, to resurrect the banks, without having to tell the public where the money the funds were going, and why. We must demand accountability from these unelected central bank leaders. But in the meantime, you should be keenly aware of the risks associated with this collusion.
Make sure you keep an allocation of your money out of the banking system. I recommend you take some of that cash and put it into hard assets like silver and gold. And be sure to decrease your debt levels — the more the better. This game can’t last forever."
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