The election year fix is in… and Janet Yellen is praying the markets hold together until November.
President Obama met privately with Yellen in April of this year. It was their first private meeting together since November 2014 (the Congressional election in which the GOP took both houses of Congress).
President Barack Obama met with Federal Reserve Chair Janet Yellen on Monday to discuss the U.S. economy amid signs that growth may be slowing as consumers retreat from spending.
Ahead of the afternoon meeting, White House Press Secretary Josh Earnest described Obama as "pleased" with Yellen, who he appointed to lead the Fed in 2014. It is the first time since November 2014 that the Fed chair has met with the president on her own. The meeting was closed to the news media.
The timing of these meetings is not coincidental. And if you think Obama and Yellen were discussing “signs that growth may be slowing” a mere 8 months before the former left office, I’ve got a bridge to sell you. The economy has been weak for EIGHT years. This is not a new issue.
The fact of the matter is Obama most likely gave Yellen her marching orders: hold the markets up until November.
Since that time, I and others have noted that a mysterious “someone” steps in and PANIC buys stocks anytime they begin to break down. The manipulation has been so obvious that a child could see it.
This has propped the markets up. But because NO ONE believes this current rally, the market fails to break higher because there is no real buying power.
As a result of this, the markets have essentially flatlined, staging nearly 39 days of flat price action. You have to go back to the ‘60s to find a more boring period for stocks.
Again, the election year fix is in. Janet Yellen got her marching orders from the White House. And she will be doing everything possible to hold the markets up going into November.
However, the financial system is already starting to come apart at the seams. There is now $230 TRILLION in debt in the financial system, up 300% from 2007 levels.
You’ll no doubt remember, 2007 was NOT a time in which debt was irrelevant. And over the next 12 months, the markets staged the worst crash in 80 years.
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Chief Market Strategist
Phoenix Capital Research