I Personally Confronted the Fed
Dear Wall Street Daily Reader,
I got an email a few years back. It was an invitation from the Federal Reserve to speak at the annual conference it holds with the International Monetary Fund (IMF) and the World Bank.
This conference is where the most elite central bankers from around the globe gather. The Fed invited me to talk at the opening session, which would take place in the very room where the Fed convenes to set interest rates.
I was in shock. I thought that the invitation might actually be a mistake.
To put it lightly, I hadn’t written very nice things about the Fed’s policies since the financial crisis.
In very public channels, I had criticized their cheap-money and quantitative-easing policies as subsidies to the private banks that had crashed the system.
I said their policies rigged the markets and failed to help ordinary citizens and the Main Street economy.
But I was assured they knew exactly who I was and that the invitation wasn’t a mistake.
In fact, they wanted me to address the topic of why Wall Street banks weren’t helping Main Street and said they looked forward to hearing my views.
I couldn’t say no. I had a chance to personally confront the Fed and give them a piece of my mind.
“Because You Never Required Them To”
At the conference, the first thing I asked the distinguished crowd was, “Do you want to know why big Wall Street banks aren’t helping Main Street as much as they could?”
The room was silent.
I paused before answering for everyone, “Because you never required them to.”
When a bank is offered a pile of cheap money in bailouts and loans for dangerous behavior with no major consequences and no stipulation that they engage the real economy, then why should they? What would you expect?
Something more interesting happened after my talk. Some of the people at the Fed — not at the top, but in the ranks — told me it made sense.
Central bank leaders, from Lebanon to Thailand, thanked me for making it clear that the entire monetary system was more controlled than ever by the major central banks, with the Fed leading the way.
I spoke with central bankers that gave me intel about how this collusion happened in practice and behind the scenes. That information was verified multiple times over.
Putting the Pieces Together
What might surprise you is that after confirming these findings with both off-the-record and public sources in multiple languages, I realized that very few had put it all together.
When I met with a key central banker in Brazil, he left me shocked after revealing his analytic findings. He presented me with reams of information about just how far the collusion went.
The central banker’s analysis showed the high correlation between the level of markets and major central bank quantitative easing.
The result of my research revealed exactly how central bankers had been rigging the world over the past decade.
The major central bankers have worked together since the financial crisis to rig the markets, inflate asset bubbles, and coddle private banks under the guise of helping the real economy.
Central banks gave themselves a blank check to resurrect the banks but did not tell the public where the money or funds were going or why.
The pandemic only intensified the existing dynamics.
“Central Banks Are the Market”
The catalyst for the COVID-19 crisis is obviously different than the 2008 recession; a viral pandemic is hardly nature’s equivalent of a subprime meltdown.
But one thing has proven similar: Nearly unlimited access to money for financial elites who, with stupendous subsidies, thrive no matter who else goes down.
Stock and debt bubbles have inflated all over again, fueled by central bank policies and federal favoritism. How else do you explain today’s great disconnect between Wall Street and Main Street?
This is why I say the central banks are the market. Without them, the markets would be nowhere near these highs.
I’ve said it before, but I can’t say it enough: It all comes down to what I call “dark money.”
Dark money is the #1 secret life force of today’s rigged financial markets. It drives whole markets up and down.
Dark money is the reason for today’s financial bubbles.
Dark money comes from central banks. In essence, central banks “print” money or electronically fabricate money by buying bonds or stocks.
They use other tools like adjusting interest rate policy and making currency agreements with other central banks to pump liquidity into the financial system.
That dark money goes to the biggest private banks and financial institutions first. From there, it spreads out in seemingly infinite directions, affecting different financial assets in different ways.
Central bank credit that supports markets is created not only by the Fed but also by central banks and institutions around the world colluding together. Global markets are too deeply connected these days to consider the Fed in isolation.
On Wall Street, knowledge of and access to dark money means trillions of dollars per year flowing in and around global stock, bond and derivatives markets.
I learned this firsthand from my career on Wall Street, which began in 1987.
If You’re Not on the Inside, You’re on the Outside
I wasn’t talking about “dark money” or central bank collusion back then. I was just beginning my career.
Eventually, I would uncover how the dark money system works, how it has corrupted our financial system and how it encouraged dangerous risk-taking.
When I moved abroad to create and run the analytics department at Bear Stearns London as senior managing director, I got my first look at how dark money flows and its effects across borders.
These dark money flows stretch around the world according to a pattern of power, influence and, of course, wealth for select groups. To be a part of the dark money elite means having power and control.
Average people have become increasingly aware that the system is rigged against them.
A new survey from Bankrate.com and YouGov shows that nearly 50% of Americans say the stock market is “rigged against individual investors.”
Even 56% of those invested in the stock market believe the market is rigged. And they’re not wrong.
This idea is not built upon conspiracy theories. On the contrary, alliances make perfect sense and operate publicly.
Even better, their exclusive dealings and the consequences that follow are foreseeable — but only if you understand how the system works and follow the dark money flows.
This dark money affects the stock market at a high level. The two move together — more dark money drives the market higher. Much higher.
“Democratizing” Dark Money
Dark money is invisible to most investors. But since I’ve left the world of big banking, I’ve made it my mission to change that.
I want to “democratize” dark money so that everyday Americans can profit from it.
And there’s a silver lining to dark money…
If you understand dark money and know where it’s flowing, you’ll have information 99% of investors don’t have.
You can find the opportunities to trade around the dark money flows that Wall Street thrives on.
And they’re throwing dark money around like there’s no tomorrow. I won’t bore you with the details, but there’s a tsunami of dark money rampaging through markets.
On top of that we’re seeing trillions in fiscal stimulus, with more to come as Biden’s $3 trillion infrastructure package waits in the wings. That should give certain sectors of the market an even bigger boost.
In the long run, dark money policies aren’t sustainable. But in the shorter run, they could keep the bull market running longer than most people expect.
Dr. Nomi Prins
Editor, Dark Money Millionaires