The Federal Reserve Bank Is Taking Control Over The Bond Market

The Federal Reserve Bank is not government. It is a private bank that loans the government all her money and requires her to pay it back with usury, which is mathematically impossible.

The Federal Reserve is not leaving any corner of the U.S. bond market behind in this crisis.

There’s no other way to interpret the central bank’s sweeping measures announced Thursday, which together provide as much as $2.3 trillion in loans to support the economy. It will wade into the $3.9 trillion U.S. municipal-bond market to an unprecedented degree, can now purchase “fallen angel” bonds from companies that have recently lost their investment-grade ratings, and has expanded its Term Asset-Backed Securities Loan Facility to include top-rated commercial mortgage-backed securities and collateralized loan obligations.

The central bank split the difference. It changed the parameters of both of its corporate credit facilities to include fallen angels that were investment grade just a few weeks ago but lost those ratings because of the intentional economic shutdown. The specific wording is this: “Issuers that were rated at least BBB-/Baa3 as of March 22, 2020, but are subsequently downgraded, must be rated at least BB-/Ba3 at the time the Facility makes a purchase.”

That’s a potential boon to the likes of Ford Motor Co., which became the largest fallen angel on March 25 after both Moody’s Investors Service and S&P Global ratings dropped its $35.8 billion of debt into speculative grade. Overall, the yield difference between double-B and triple-B rated debt has ballooned to 290 basis points from as little as 38 basis points in December. (source)

The translation for this article from “financialese” (the technical language of finance that is confusing to most people) is that the Federal Reserve bank is buying up the debt of corporations in bond form that is most likely unpayable. This would be like making a bond supported by the car debt of people who buy cars from those “bad credit, no credit” car commercial places.

Do you really believe your loan is going to get paid back?

You would have to be insane.

So why would she do this? It does not make sense from an investment point of view. However, it makes a lot of sense from a power and control point of view.

The Federal Reserve Bank is purchasing the debt and in doing such is able to exercise control over the corporations as a creditor, for as the Bible says, the borrower is always the slave of the lender. Given the Federal Reserve Bank’s relationship with the government, what one is seeing is a corporate-government unified takeover of major corporations by way of a symbiotic union and rule over the people.

It is the union of state and corporate power, which is also the definition of fascism.

You are witnessing, in real time, the rise of fascism in the US.

There are no bullets being fired.

There are no men in brown shirts marching.

There are no weapons or rallies on the streets.

There are just men with pens and pieces of paper, signing forms and entering data on a computer. It is a very clean and rather boring process. However, boredom does not mean that it is insignificant. Far from it, what one is seeing is the complete destruction of the nation’s relationship between government and economy. It is going through a fundamental metamorphosis into something people have warned about for many years but few payed attention to.

We are becoming the very thing that we said we would fight against in World War II. It is happening with no opposition, much less understanding of the fundamental aspects of what is taking place, amid and impoverished and continually being impoverished population struggling to pay for basic needs.

For those wondering, it also does not mean that ‘jobs are going to come back.’ To the contrary, it means that more jobs are going to be lost as people are forced out of work due to the economic changes.

The only people who win are those with lots of money who have an investment into the current system. The rest of the country are the losers who will suffer under it.

Donate now to help support the work of this site. When you donate, you are not donating to just any commentary group, but one that is endlessly observing the news, reading between the lines and separating hysteria and perception from reality. In, we are working every day, tirelessly investigating global trends and providing data and analysis to tell you what lies for the future.