Nomi Prins: Trump's New Dark Money Man Takes Over

Authored by Nomi Prins via The Daily Reckoning,

During her last news conference in December, Janet Yellen stood firm on her record stating, “The global economy is doing well. We’re in a synchronized expansion. This is the first time in many years that we’ve seen this.”

While attempting to lock in her record, Yellen urged, “There’s less to lose sleep about now than has been true for quite some time.”

Well, a lot of people lost sleep these past few days. And they might lose more sleep in the days to come.

Markets were due for a correction. Whether it turns out to be something worse, time will tell.

A recent article in MarketWatch said 2018 could “be the year the stock market rally screeches to a halt.” That’s because at some point debt bubbles are going to pop, and after they do, stocks will follow.

The Fed has continued to provide what I call dark money to big Wall Street banks while they continue to buy back their shares with it.

Dark money comes from central banks. Ultimately, central banks “print” money or electronically create funds to purchase bonds or stocks. They also use tools like adjusting interest rate policy and currency agreements with other central banks.

Dark money then flows out to the biggest Wall Street banks and financial institutions. Policy makers set the tone for central bank fabrication and movements of money through markets, banks and the world.

Because of dark money provided by central banks, corporations have been piling on debt like arsonists hoarding lighters before a fire. They’ve been using that debt either to service old debt or to buy their own stocks. That move artificially elevates their share values and in turn makes more bond investors relish buying their debt.

Apple, for example, has been one stalwart that’s been riding “the borrowing bandwagon as it looks to fund its massive share buyback program.” Apple went as far as to issue $12 billion of debt in the last four months of 2017 in order to buy its own stock.

The entire U.S. primary corporate bond, or debt, market has been at record levels. There was $1.44 trillion of investment-grade issuance in 2017 compared with $1.34 trillion in 2016. There was $266.3 billion of high-yield issuance last year, that sector’s fourth-biggest year.

This debt creation can’t sustain itself forever. It doesn’t take but a tiny mistake by central bankers to throw the bond markets into disarray.

Equity markets don’t always follow right away, but they will eventually follow. And these past few days, equities marched in lockstep with the spike in bond yields.

The Fed’s balance sheet reductions until now have basically been a rounding error. But last week, the Fed sold $22 billion of assets. Is it a coincidence that stocks sold off?

But this would just be a taste of what could happen.

As the MarketWatch article I mentioned says, “If and when the bubble does pop, however, the deleveraging by lenders could create a credit crunch the likes of which haven’t been seen since the Great Recession.”

Let’s briefly review how we got here…

After the 2007–08 financial crash, the Federal Reserve starting buying $3 trillion worth of U.S. Treasury and mortgage-backed bonds from banks and the market. This epic purchasing power manipulated prices, drove down bond yields and “provided an artificial boost to the stock market.”

That’s not free market economics. The artificial nature of this move should concern any investor. The Fed’s maneuvers have only grown from there.

All told, the Fed’s book of assets has quadrupled from $914.8 billion in late 2007 to $4.5 trillion in 2014. It did this through a bond-buying program dubbed quantitative easing (QE) and in stages called QE1, QE2 and QE3. Even now the size of its asset book is over $4.4 trillion.

The Fed, or any of the major central banks that took the same course, never had any real unwind strategies for this. While outgoing Fed Chair Janet Yellen may have given speeches about how the Fed will “normalize its balance sheet back to something resembling pre-crisis days,” she really did nothing about it. The Fed has been talking about this since 2011.

Right now, we’re looking at another five years or so before the Fed’s balance sheet would normalize under the current schedule. Finally, in October 2017 the Fed supposedly began to cut its bond buying program by “shrinking the amount of its maturing bonds that it will roll over into new bond purchases.”

But as I explained, it was mostly cosmetic until a more substantial reduction last week. The question now becomes whether or not Janet Yellen’s successor, Jerome Powell, will change course.

Here’s my answer:

Don’t expect Powell’s policies to differ from Yellen’s. He also won’t change from her predecessor, Ben Bernanke, as his voting record shows us, aside from pressing for more leniency for Wall Street.

As the former number two man on the Federal Reserve Board of Directors, he has a record of pressing Congress to weaken the Volcker Rule provision of the Dodd-Frank Act. The Volcker Rule was a security measure meant to prevent banks from making risky bets using taxpayer money.

His stance dovetails with that of the Trump administration — specifically that of Treasury Secretary Steven Mnuchin, who endorsed him for the post. So Powell will be friendly to dark money creation.

While Powell may have once had some reservations about voting for the Fed’s quantitative easing (QE), or dark money creation, in the past — he ultimately voted for it.

Powell and the Fed board, under his leadership, will continue to watch for blips in the market or amongst banks. Any signs of distress, like we’re seeing now, implies more dark money will enter into the market. At the very least, I think they will hold off tapering of the Fed’s books (quantitative tightening) as promised last year.

As I revealed in my book, All the Presidents’ Bankers, the revolving door between Wall Street and Washington is very real. It is also one of the most powerful and influential aspects of government. Power and money have no real party allegiance.

See, no matter who sits in the White House, dark money calls the shots. Effective today, we have a new financial alchemist in Washington.

Don’t expect Trump to talk about his newest Dark Money Man at the Federal Reserve. By law, the Fed is supposed to be regulating Wall Street. What Trump brings to the halls of the Fed will, however, matter to us all.

A reservoir of dark money is waiting to flow into the places that offer opportunity and security. It will flow into the stock and bond markets if things get dicier. Look for a massive amount of central bank money to enter the market and infiltrate sectors like renewable energy, infrastructure and construction, blockchain innovations and cryptocurrency.

What all of this means is the more dark money entering the financial markets, the better the opportunity for investors.

While this bubble continues to grow it won’t last forever. It can’t.


zorba THE GREEK lloll Tue, 02/06/2018 - 21:39 Permalink

Powell sure started off with a bang. He had to create a few 100 billion of that dark cash to move the market up today against the flood of margin call and fund redemption selling. And he stopped the algo selling yesterday from causing the market to limit down for the day. At one point, the markets were dropping 1% a minute. It takes a Hoover Dam of money to stop that kind of selling flood. We will never know how much of the market the Fed has bought in the last two days, but we do know now Powell is determined to keep it elevated, even if it means going "Japan" on it.

In reply to by lloll

Jung lloll Tue, 02/06/2018 - 21:49 Permalink

The ones who have done this for centuries and since 1913 (the Fed Res Ltd company, privately owned) it has become worse: the Rothschilds, Warburg-Schiff-Rothschild have profited from both world wars which they did by getting both and more parties involved into more debt. The debt economy would not have been here without that group which is powerful enough to own all Central Banks and work towards world domination. The Zionists always win.

In reply to by lloll

Implied Violins Jung Tue, 02/06/2018 - 23:33 Permalink

...and they've been doing this for a VERY long time - chart of the history of the reserve currency, which changes like clockwork every 70-100 years:

(though in actuality, the reserve currency gambit goes backwards in history through Rome, Egypt, Greece, Babylon etc.)

...and it's only a select few families that run this millennium-long Ponzi:

(part 1 of 4 very well researched articles - though there is proof that going back all the way to Babylon, there have only been 13 families involved in the money-changing gambit.)

In reply to by Jung

Memedada BabaLooey Wed, 02/07/2018 - 03:28 Permalink

Here is the problem BabaLooey.

Trumps cabinet is comprised solely of deep state handlers/pawns: Goldmanites, MIC-generals and Exxon CEO’s.

Trump has not proposed or implemented one policy that challenges the deep state: name me one?

The deep state concept is older than the indoctrinated Trumpards that uses it. It describes the same powers that controlled Obama, Bush (the first and the lesser), the Clintons and all official political entities put in front of the US plebs to “choose from”.

The late circus about the “DOJ, CIA, FBI, NSA etc.” as being the deep state is a perfect psyop. Those entities are not the deep state but servants of the deep state. Like the US gov. is. The deep state is all the old money (dark money in the above article). That is the winners of the first round of Monopoly/capitalism in the 1800’s and some very old money from the former empires (the British and Dutch royal families). Also known as the money masters – or the 0,01 %. Basically just a few families (a few thousand people): Rockefellers, Vanderbilt, Morgan and Rothschild. Their fortunes are not measured officially (but are measured in quadrillions) and they do not appear in the fortune 500 (they own them all). And Trump is a small “fiat”-fish to them – a pawn.

Plus, Trump is obviously a retard (with a vocabulary of a ten year old, an understanding of history, politics and economics like an average US pleb (=none) and an ego that illustrates total lack of self consciousness (and self-irony)).

In reply to by BabaLooey

Radical Marijuana Mr_Potatohead Tue, 02/06/2018 - 22:34 Permalink

Nomi Prins Fingers Trump's Financial Arsonists: "Next Financial Crisis - Not If, But When" | Zero Hedge

The Emperor Has No Rules

Nearly every regulatory institution in Trumpville tasked with monitoring the financial system is now run by someone who once profited from bending or breaking its rules. Historically, severe financial crises tend to erupt after periods of lax oversight and loose banking regulations. By filling America’s key institutions with representatives of just such negligence, Trump has effectively hired a team of financial arsonists.

In reply to by Mr_Potatohead

ISEEIT Tue, 02/06/2018 - 21:56 Permalink

It's called money supply in simple terms.

She is credible...I actually have some respect for her.

Framing money supply as 'dark money' is somewhat disingenuous....

And late to the party.

Nomi is being very SELECTIVELY 'honest'.

nsurf9 Tue, 02/06/2018 - 21:58 Permalink

Simply put, in 1913, Congress was complicit enough to give these SOBs the Constitutional Right to rob us, every day, hour and second of ours, and our children's, lives - even though Congress had no constitutional authority to do so.

After I have traded my work and time for an IOU, no one should be able to take from my labors - without due process.



Radical Marijuana nsurf9 Tue, 02/06/2018 - 22:55 Permalink

The Biggest Scam In The History Of Mankind

That is a relatively easy understand presentation of how the Federal Reserve Board is central to the ways that the US government enforces frauds by private banks. (One of the points made towards the end of that video is that the private banks which own the Fed are guaranteed 6% profit.) The graphics there illustrate the relatively tiny role that flesh and blood individuals play when they labor for their increasingly negligible share of the public "money" made out of nothing as debts.

"After I have traded my work and time for an IOU, no one should be able to take from my labors - without due process."

It is not about any idealized "should,"  but actually about almost totally triumphant organized crime. The essential Catch 22 is "you" can NOT stop the ways that public governments enforce frauds by private banks in ways which amount to symbolic robberies of the many by the few, since the vicious feedback spirals of the funding of the political processes may be metaphorically described as already having gone beyond the event horizons of social black holes.

I agree that it seems a theoretically correct interpretation that both the Fed and the income tax are patently unconstitutional. However, that the courts were also corrupted by the relentless feedback funding of the political processes is one of the ways that everything accumulated to make it politically impossible to stop that in any good ways.

"Congress was complicit enough to give these SOBs the Constitutional Right to rob us, every day, hour and second of ours, and our children's, lives - even though Congress had no constitutional authority to do so."

Similarly, the mass media and public school systems were also swept up into the long history of the funding of political processes, such that most of the mainstream media have been quoting the new Chairman of the Fed with a straight face, and without criticism, as saying that he will maintain the "independence" of the Fed from political influences.

There are no reasonable doubts about the basic history of
the currently established systems of public governments
enforcing frauds by private banks
as described by Carroll Quigley:

"... powers of financial capitalism had another far-reaching goal, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole ... to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements. ... The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. ... It must not be felt that the heads of the world's chief central banks were themselves substantive powers in world finance. They were not. Rather they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up, and who were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks."

Of course, that was NOT really "financial capitalism," but rather, relatively recent manifestations of how Globalized Neolithic Civilization became based on the methods of organized crime being applied on larger and larger scales, as social slavery systems became more sophisticated.

"If history shows anything, it is that there’s no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt — above all, because it immediately makes it seem that it’s the victim who’s doing something wrong."

— David Graerber

Silent Weapons for Quiet Wars

"Energy is recognized as the key to all activity on earth. Natural science is the study of the sources and control of natural energy, and social science, theoretically expressed as economics, is the study of the sources and control of social energy. Both are bookkeeping systems: mathematics. Therefore, mathematics is the primary energy science. And the bookkeeper can be king if the public can be kept ignorant of the methodology of the bookkeeping. ... In this structure, credit, presented as a pure element called 'currency,' has the appearance of capital, but is in effect negative capital. Hence, it has the appearance of service, but is in fact, indebtedness or debt. ... if balanced in no other way, will be balanced by the negation of population (war, genocide)... They must eventually resort to war to balance the account, because war ultimately is ... the balancing of the system by killing the true creditors (the public ...)"


& so on:

In reply to by nsurf9

spheres777 Tue, 02/06/2018 - 22:06 Permalink

"Power and money have no real party allegiance."   yeah they do, they all have an allegiance to baal,bahphomat,lucifer,isis,saturn, aka anubus....on and on

coast1 Tue, 02/06/2018 - 22:36 Permalink

I posted earlier about the stocks going up today, and said "maybe trump cried uncle"...Now, I dont know for sure, but there is alot of information that this was the deep state telling trump to stop...anyway, I got 6 up arrows but 9 down arrows...Dont you think, after reading this article and all the other info out there, 666, etc. that this was a warning to trump?  and if the stock market went up, could that not mean trump gave in? at least for now? Or, I suppose it was just a warning shot at the bow.... It is good that we question everything.

BitchesBetterR… Wed, 02/07/2018 - 00:48 Permalink

My hommie Rob Kirby has spoken in lengths about the "Dark Money-Dark Dollars" via the E.E.F. in order to sustain the empire at all costs....

Naomi Prints just confirmed it in the open..... 

NumbersUsa Wed, 02/07/2018 - 01:05 Permalink

jew supremacist dark money coupled with their non-stop warmongering murderous sickness.

Immediately Remove all dual citizen israelis from all of our federal, state, & local governments ( both elected & employees)- NOW !

Prosecute & shut down all Foreign Agent jew supremacist organizations such as Aipac, Adl, Aclu, Splc, Jwc, jdl, Zoa and a thousand more by using the Fara Act-NOW !

The warmongering jew supremacists are the ENEMIES of the entire world and always have been.