I knew it was happening, but now the details are coming out. And Pam and Russ Martens as usual are on it. In their latest article, they tell us the how and who are providing the Socialized Pre-Bailouts of Wallstreet. Wow.
It’s called “Going Direct.” That’s the financial bailout plan designed and authored by former central bankers now on the payroll at BlackRock, an investment manager of $7 trillion in stock and bond funds. The plan was rolled out in August 2019 at the G7 summit of central bankers in Jackson Hole, Wyoming – months before the public was aware of any financial crisis.
One month later, on September 17, 2019, the U.S. Federal Reserve would begin an emergency repo loan bailout program, making hundreds of billions of dollars a week in loans by “going direct” to the trading houses on Wall Street.
The Fed plans to leverage the $454 billion into a $4.54 trillion bailout plan, “going direct” with bailouts to the commercial paper market, money market funds, and a host of other markets.
One feature of the BlackRock plan that is certain to get wide public pushback in the U.S. is the proposal for central banks to buy stocks (equities). The authors write this:
“Any additional measures to stimulate economic growth will have to go beyond the interest rate channel and ‘go direct’ – [with] a central bank crediting private or public sector accounts directly with money.
In the United States, approximately 85 percent of the stock market is owned by the richest 10 percent of Americans. Buying stocks would simply expand and accelerate the wealth and income inequality which is already at the highest levels since the 1920s – a time when Wall Street also owned large deposit-taking banks.
The Swiss National Bank, the central bank of Switzerland, where one of the BlackRock authors previously worked, already has massive holdings of individual stocks, including $94 billion in publicly traded stocks in the U.S. according to its March 31, 2020 report that was filed with the Securities and Exchange Commission.
BlackRock is not only a major marketer of corporate bond products. Its iShares brand includes a giant roster of stock-based ETFs. The Chairman and CEO of BlackRock is Laurence Fink.
Reuters reported last July that Fink was lecturing the European Central bank that it “will need to purchase equities to stimulate Europe’s economy, and that leaders should find ways to have investors embrace an ‘equity culture’ there.”
The “equity culture” is code for what Senator Bernie Sanders calls “socialism for the rich, and rugged, you’re on-your-own individualism for everyone else.”
My comments: The job of the Federal Reserve is to provide oversight to the largest players in finance – to provide stability. But instead they fostered the world’s largest credit bubble in history instead of pushing back. They are guilty of gross negligence and now bailing themselves out.
“Going Direct” to the trading houses – are you kidding me! Meanwhile Chairman Powell is trying to rewrite history telling us today the banking system was strong prior to the virus. He was already bailing the banking system out.
And Central Bank buying equities via the stock market does not help corporations, it merely protects the paper wealth of mostly the upper 10%. And that is the point of most of these programs.
This is not capitalism, this is utter corruption of the financial system. Our economy and national security has suffered because of it. With massive unemployment as the stock market surges to crazyland valuations, the effects of their policies is becoming a little obvious, don’t you think.