Originally published by 9.11.16 by Tim Picciott at: FocalPoint Wealth

Earlier this week the Federal Reserve decided to leave its key interest rate unchanged Surprise… Surprise.  The FED would like you to believe they are an independent and unbiased organization, but the fact of the matter is that they are nothing more than political hacks who serve the administration they work for.

Below Ben Bernanke, while giving an interview for Freakonomics admits just as much.  Start watching at the 24-minute mark for a bombshell 90 seconds of Ossama Ben Bernanke trying to cover up the fact he was completely wrong in 2005.

In case you had any premonitions that the FED was independent, please check out the excerpt below and listen to the audio for yourself.

EXCERPT:

FE:  " What do you think when you hear that statement of yours from 2005" ( Bernanke telling CNBC that housing was a localized problem, and he was confident banks had high underwriting standards- starts at 24:00)

BB: "Well it was partly the result of the fact I was representing the administration, and you really don't want to go out and say 'run for the hills.'"

Photo credit WSJ

Speaking of Independence

In 2017 all but one of the voting FOMC members will be Ex-Goldman Sachs alumni… how's that for independence!

Goldman has recently come out and banned its employees from donating to Trump!  Since Goldman partly owns the FED and since they dominate the FOMC positions, then by extension this ban on Trump represents a blatant violation of the FED's supposed independence!

It is also another classic example of the fox watching the hen house.

The FED is acutely aware that the stock market predicts elections 86% of the time according to research done by Investech Research as seen in figure 1.

Figure 1

If we go back to January of 2016 we can see the ramifications of the FED's last rate "hike" as seen in figure 2 from the St Lois FRED site.

So with the Dow dropping over 1000 points the last time the FED raised rates, you can bet the FED will find every excuse under the sun not to raise rates.

Donald Trump has already stated he would fire Janet Yellen and with the FED's mouthpiece, Goldman Sachs banning employees from donating to Trump (while giving $675k to Hillary for bribes… I mean speaking fees)… it's not too much of a stretch to imagine a scenario where the FED is doing everything in their power to prevent a Trump presidency.

Donald Trump has recently slammed The FED for creating a "false economy" and "artificial stock market"  in the clip below.

It is interesting to note that before August 26th, the DJIA had the lowest volatility we had seen since the US got off the gold standard!  According to a CNN Money article where they referenced LPL research   "The benchmark index went 17 straight days of moving less than 0.75% between the day's peak and the day's low, LPL Financial reports. That hadn't happened on records going back to 1970."

One way the market could be kept in check is through the Options markets.   According to a Zerohedge.com article, Options traders have never been more bullish on the S&P, and this comes as we are about to enter the final stretch of the most contentious election I can remember.

The conspiracy theorist in me thinks other central banks or treasury departments may be the ones proving the Bid for the call options as that would be the easiest way to "Rig" the markets, although I have no way of proving this…yet.   The FED's previous bailout programs greatly helped European banks so maybe they are returning the favor.   According to the chart below you can see that central bank balance sheets have been exploding… and as we've seen from the BOJ they aren't just buying bonds.

The other reason the FED can't raise rates is that they have a 4.4trillion balance sheet and the government almost has 20 Trillion in debt.  If you reference my previous blog post where I explain "Where Money Comes From" then you will understand the corner the FED is backed into.

If rates were let's say 3%, the government would more than likely have to borrow at 5%.    Quick math says 5% of 20T is 1T and where are we going to get those funds from…?   The answer is the FED along with other Central banks are pretending they have everything under control and only wants to fake it long enough to make sure Hillary gets in.

Economist and Investor Peter Schiff has stated the Fed is doing the opposite of the Teddy Roosevelts strategy.  Instead of speak softly and carry a big stick, they are yelling as loud as possible, because they don't have a stick!

BOJ President

The last thing the power structure wants is the Donald Trump monkey wrench to ruin their work of further integrating the global economies of the world.  Ultimately the powers that be want to crash things so they can remake the world with their "utopia."   This is straight from the Cloward and Piven (see below) playbook and if Trump is the one rebuilding the country then their agenda will be set back decades… if not permanently.

Now you can understand why the FED will not be raising rates.

Cheers,

The Libertarian Advisor

Make America Free Again