A Wall Street Taper Tantrum? Will it Last?

The Fed’s jargon defines tapering as a “reduction in the pace of the Fed’s security purchases” Link: https://www.stlouisfed.org/open-vault/2021/november/what-fed-tapering-means . What tapering really means is that the Fed is reducing the amount of cash it injects into the “economy” on a monthly basis… in reality, injected into Wall Street.

Fed propaganda says the Federal Reserve purchases only certain securities from the Treasury for its cash injections, but as documented by Pam and Russ Martens on their excellent website, it can be shown that the Fed does much more than benignly collude with its private dealers to support the “economy” (read: stock market). Link: https://wallstreetonparade.com/2020/03/the-dark-secrets-in-the-feds-last-wall-street-bailout-are-getting-a-devious-makeover/ . In other words, the Fed ensures that its primary dealers stay in business, and its privately held banks must stay afloat, too.

No need for a lengthy narrative on how the Fed and its dealers game the Treasury market. Plenty has already been written about that. Bottom line is that there are a number of instruments, bills, notes and bonds (and their variants) that the “bond market” consists of, and the Fed itself (with collusion of its dealers) has been the primary buyer and seller in that market.

Wall Street and its “economists” define, by their own obfuscated jargon, a taper tantrum as being a spike in short term bond yields when the Fed threatens to tighten monetary policy (ie increase interest rates). Usually bond bagholders bail when Fed fund rates rise, and the Fed is forced to (almost) entirely support the T-bill/notes market when primary dealers rebel. Again, BlackRock, Vanguard, StateStreet, etc. are primary players in the bond market via the Fed’s primary dealer banks, of which BlackRock, Vanguard, StateStreet, etc. are the major holders. More on that later.

But as usual ‘economists’ define “taper tantrum” Link: https://www.nasdaq.com/articles/blackrocks-fink-sees-flattening-yield-curve-amid-bond-tantrum-echoes only in the rarified atmosphere and vacuum of reality called Wall Street, hoping their lofty economist lingo will confuse plebs so they’ll never get what’s truly going on.

Recall that Vanguard Group and its henchmen represents the major holding of all US stock major market issues, and is the major holder of the Fed’s own primary dealer banks. One market example is Google, but there are many many more, too numerous to list here.

In what should be a conflict of interest, the Fed funds Vanguard Group and its henchmen, keeping them fat and happy, in a governmental*/private collusion that has prevented US share markets from cratering for any length of time, in recent years.

So, instead of the economist’s version of the taper tantrum jargon, consider what’s happening now in the markets where Vanguard Group and their peers posture for what’s next. The leading lights don’t connect the current downturn in the Dow with a taper tantrum, but the decline in the Russell 2000 has been more pronounced: Link: https://www.google.com/finance/quote/RUT:INDEXRUSSELL?window=6M and to some extent the SPX, ever since the Fed began reducing its cash injections into the economy. The result? Fed-Treasury hopes for a controlled burn in the markets, reducing the froth, with some tangential effect of curbing higher inflation.

But there is a greater element at work. As written about before, the United States produces very little that is real, beside food and military products. Most all US consumer goods are produced elsewhere, primarily in China. And while China’s economy has thrived by being the workshop for the world, the United States has been forced by Wall Street into general industrial decline. Bottom line, because the US has no real growth stocks based on anything real, the US must base its economy on the unreality of FAANG stocks, meme stocks, and all that Vanguard and BlackRock own…. including bitcoin issues.

The FAANG and meme stocks (made of air) may be one thing, with FinTech crypto shares entirely another. The big decline in Vanguard’s FinTech-related shares ARKK, RIOT, MARA, GBTC, MSTR etc is of interest because Vanguard has huge capital interest – and is the primary holder – in all of the foregoing issues, including major ownership of nearly all major US Wall Street issues. So, we can write that Vanguard Group and BlackRock not only hold a primary proportion of all major US publicly-traded corporations, they also sponsor/promote the highly speculative FinTech and crypto-related share issues.

The big decline in Vanguard’s ARKK, RIOT, MARA, GBTC, MSTR etc shares may not be the result of a Vanguard ‘taper tantrum’, but an actual structural shift in how the Federal Reserve itself views/supports Wall Street’s promotion of bitcoin and the FinTech industry. And that, of course, is the outcome every laser-eyed ape must fear. In brief, the potential for sanctions evasion, F U money, environmental harm, and just the basic lie about currencies being currencies that are not currencies, but instead rampant speculation, may have caused even the crooked Fed-Treasury – and its partner in crime Vanguard Group – to stop and ponder. **

Of course bitcoin will not fail.*** Bitcoin, ethereum, etc are just too useful as black hole vehicles for stashing inflationary fiat. But rather than a taper tantrum, it appears that the Fed and its henchmen are now taking stock of what’s next for FinTech, causing a pause in the mania.

As always, Novus Confidential must ask about the elephant in the room. If there is no rebound in bitcoin and FinTech…. where will those many hundreds of fiat billions get laundered to? Certainly not into gold or silver, which in their real form challenge the supreme status of the dollar US. Plus, gold and silver are heavily gamed/manipulated by the CME, LBMA, BIS and Fed itself. Also, those many liquidated FinTech billions may not be allowed into commodities, because that’s highly inflationary. Speculation exists that those billions will regurgitate into “value shares” … but truly, what are the ‘value stocks’ and how to define them? Isn’t it the Vanguard Group that defines everything? In collusion with the Fed, of course! And there is not much of value domestic to the US, except production of military hardware and giant agra.

We may accept that the present minor decline in the Dow and more significant decline overall is not a taper tantrum but something more like a controlled burn. But even so, the Vanguard Group-Fed need to figure out where to stash those hundreds of liquidated billions… and quickly. Since 2008-2009 the Fed by its conspirators (Vanguard BlackRock etc) has truly taken overall control with regard to US share markets. And recall, the Fed has only “reduced the pace” of its cash injections.

So the ultimate question: what message is the Fed sending with this controlled burn? A message to itself?? Hoping for reduced inflation while carefully manicuring any spike in bond yields? And why the emphasis on hammering the most speculative sector (FinTech) that the US needs to maintain its illusory market dominance going forward?

Perhaps the greater question is whether the Fed and its henchmen – like Vanguard – even understand their own message, or the danger their criminality has engendered since the financial collapse of 2008-2009.

For now, only confusion reigns.

*government only when considering that the private Fed operates at the behest of the Treasury (supposedly)

** Russia, Singapore, India, and China have already, or are in process, of declaring bitcoin an illegal speculative pyramid scheme, unable to transact in their countries

***Another contrarian view: bitcoin will fail when the USd as global reserve currency is eventually usurped. (for another time)