Former Head Of Plunge Protection Team Says Fed Has To Buy More Debt


Zero Hedge: Last Wednesday, as stocks hit session lows amid fears that the Fed was so polarized on further easing and with the Fed’s dot plot suggesting no more cuts this year that odds of further rate cuts in 2019 dropped precipitously, Chair Powell catalyzed a dramatic rebound in risk assets when during his press conference  he said that

It is certainly possible that we’ll need to resume the organic growth of the balance sheet sooner than we thought.

One day later, with the Fed engaging in overnight repos to unfreeze the clogged up plumbing in the repo market, the release of the Fed’s weekly H.4.1 statement confirmed that Powell was spot on: the Fed had indeed resumed the growth of the Fed’s balance sheet “sooner than we thought.” more…

Opinion: Don’t be intimidated. When the Federal Reserve buys bonds interest rates move lower and vice versa.

Wall Street has a language similar to a foreign country. After a career there, I can confidently say there are some things even industry insiders don’t really understand. The words ‘Repo’, QE, or Twist are all innocuous words for money printing. It means our debt is so big that we don’t have any idea what to do, besides more of the same.

If the Federal Reserve raises interest rates, the amount the US pays in interest to debtor countries like China will skyrocket. If the Fed lowers interest rates too much, savers and retirees will be forced to take risk that could lead to financial ruin which almost happened in the 2008 financial crisis.

While low interest rates sound like a solution, pension plans, which, by law must invest up to 40% in government bonds, will be unable to meet payout obligations, leaving millions without a retirement income.

Enter the Plunge Protection Team.

Our post January 15, 2016: “The plunge protection team (PPT) was created to shore up markets. To buy (with tax payer money) when everyone is selling and vise versa. 

The team consists of the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve, the Chairman of the SEC and the Chairman of the Commodity Futures Trading Commission.”

Even with the esteemed team, we didn’t solve the 2008 crisis. We simply printed money to bail out ‘too big to fail’ banks creating debt that cannot be paid back. So now the Fed is creating more.

Prophecy students should be hyper aware of a global financial crisis that the PPT and central banks will be unable to bail out:

Third Seal: Scarcity on Earth

When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand. And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” Rev 6:5-6

In the prophecy, it will take a full day’s work for a person to feed themselves for 1 day. The rich (oil and wine) are unaffected for a time. The Black Horse follows unprecedented war (Rev. 6:3-4) and according to the next 9 (chronological) chapters (Rev. 7-16) things on earth get progressively worse.

The part few understand is that hyperinflation happens suddenly.