THE CURRENT BANK CRISIS –
TRUMP VS THE FED
By
Dr. Stephen Jones: Oct 12, 2019
Blog Post Date: 10-13-2019
Last
month I reported how the banks were having a liquidity shortage and how the
Federal Reserve was stepping in to give $75 billion per night in overnight
loans. Those loans were not cumulative, of course, as they were being repaid
the next day.
However,
there were also longer-term loans, some for 2 weeks, for banks that were in
more serious trouble. Once the 2 weeks ended, they simply rolled it over and
gave them a new 2-week loan. These loans are now up to more than $240 billion.
The
bottom line is that the liquidity crisis is ongoing, and so the Fed is now
doing Quantitative Easing (QE), which is bankerspeak for creating new money.
The Fed balance sheet is now going back up after QE3 ended a few years ago.
This is a “repo” bailout, but it is actually a QE4 of about $60 billion per
month.
They
are trying hard not to call it QE, because the public is now familiar with that
term. Likewise, they claim to be doing it for just the next four months. But we
all know what that means. It’s a bit like sending troops to Syria for 30 days
for a nice little war. It is sold to the public incrementally.
Just
one day after we laid out what Goldman’s revised forecast for the Fed’s “NOT A
QE” will look like, which for those who missed it predicted that the Fed would
announce “monthly purchases of about $60BN for four months, split across
Treasury bills and short maturity coupon Treasuries, in order to replenish the
roughly $200bn reserve shortfall and support the pace of growth in non-reserve
liabilities”, the Fed has done just that and moments ago – well ahead of
consensus expectations which saw the Fed making this announcement some time in
November – the US central bank announced it would start
purchasing $60BN in Bills per month starting October 15.
What
does this mean?
Under
the Fed’s system, there are “market cycles” which are anything but “natural
cycles.” Every 7 or 8 years the Fed raises interest rates, supposedly to combat
inflation, but it is really to foreclose on property, transferring money from
the people to the wealthy. The banks foreclose and often then auction property,
which is purchased by the wealthy at low prices. The banks themselves do not do
so well, but the bankers themselves, if they purchase these properties, do very
well long-term.
The
last crisis was 11 years ago. We are long due for a market correction, but
Trump has worked hard to build up the economy and to bring manufacturing
companies and jobs back to America. So the “normal” downturn has been delayed
for a few years, even though the Fed began to raise interest rates shortly
after Trump came into office.
The
Fed bosses like to raise rates to crash the economy as a political weapon,
knowing that the public has been tricked into thinking that the President is
the one who controls the economy. Actually, the Fed controls the economy and
financial system through its “independent” control of interest rates. The Fed
wants power but does not want to claim responsibility for its own actions.
Trump
understands how the system works, and so he has been very critical of the Fed’s
interest rate hikes. He perceives that the Fed was intending to put the brakes
on the economy so that people would blame him when the markets crashed. The Fed
is part of the Deep State that wants to ensure that Trump does not win the 2020
election.
But
Trump has “trumped” the Fed. First, by drawing attention to their high interest
rates, he has made it possible to blame the Fed if the markets crash. Secondly,
if the Fed lowers the interest rates, and the economy continues to do well,
Trump can take the credit for a good economy. It’s a win-win situation for him.
So
the Fed has finally begun to lower interest rates just as the bank liquidity
crisis has hit.
The
Fed’s banking system is long overdue for a collapse. Most monetary systems do
not last nearly as long as the Federal Reserve Notes have lasted. From the
Bretton Woods agreement in 1944 to the abandonment of the gold standard in
1971, was just 27 years, after which time we replaced it with the oil standard
and the petro-dollar.
From
1971-2019 the petro-dollar has lasted another 48 years. Now this system is
breaking apart, and we are due for another change. There are differing views as
to what this change will look like, but Trump’s public statements indicate that
we are going back to a gold standard. We will see how that works.
Meanwhile,
we are now seeing banks coming under pressure, not only for a liquidity crisis
but also for their manipulation of gold and silver prices and their massive
derivative problem, which were not resolved after the 2008 crisis. In 2008 the
banks were bailed out by the government; such bailouts will not be as easy to
sell to the public in 2019.
Nonetheless,
the Fed’s QE4 should give us a little more time before the real crisis hits and
they have an excuse to move to a new system. It appears that Trump wants to
forestall that crisis until his second term begins in late 2020 or 2021. His
opponents in the Democratic Party, however, want to see a financial crisis
before the 2020 election so that they can blame Trump’s trade policies. We will
see who wins that fight.
The
crisis will surely come at some point. Some say it is at our doorstep even now.
But because the markets have been rigged for decades, I do not think that
Trump’s Treasury Department will lose control of it. When the crisis hits, it
will because it was allowed to happen. It will be allowed at some point in
order to give an excuse to move to a new system.
So
be prepared but do not be afraid. Always remember that no man has ultimate
control over world events. God has already ruled against the beast system and
has transferred authority to the saints of the Most High. What happens will
work in our favor, even if it appears to be a crisis. We know the Word, and our
faith is based on hearing the Word of God, not the words of men.
