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18/05/2021

Strategika 51

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The Bigger Picture-Steve Brown

Just moments before speaker McConnell announced the latest trillion dollar ‘stimulus deal’ the Exchange Stabilization Fund https://home.treasury.gov/policy-issues/international/exchange-stabilization-fund began boosting dollar valuation via the Bank for International Settlements https://www.bis.org/, with gold swaps. https://www.bis.org/publ/work906.htm As gold and silver spot prices began to rise in Asia, like clockwork, Mr Burghe engaged in his daily business: namely, BIS trades to suppress gold and silver spot. This time he began suppressing about one hour earlier, at 5am EST.

Well before 6am eastern, the US dollar index https://www.marketwatch.com/investing/index/dxy rebounded surprisingly from its previous sub-90 lows to show strength above 90, in relation to a basket of major currencies. Note that we are referring to Exchange Stabilization Fund (ESF) intervention here, and not Federal Reserve or United States Treasury intervention, because the ESF supersedes both.

The Exchange Stabilization Fund dates back to 1934 with a remit by Congress to “protect the dollar”.* As such, the ESF slush fund https://wallstreetonparade.com/2020/12/trump-issued-an-executive-memorandum-giving-mnuchin-a-50-billion-slush-fund-mnuchin-gave-himself-386-billion-more/ may engage in any activity – including criminal activity — to protect it. The Exchange Stabilization Fund is entirely opaque, does not answer to any monetary authority, and the ESF is not regulated or audited. The ESF is not overseen or answerable to Congress. The Secretary of the Treasury runs the ESF, with chairs of the Fed and SEC in subsidiary role.

By delaying the new hand-out bill, Toomey hoped to highlight https://www.cnbc.com/2020/12/21/covid-stimulus-sen-pat-toomey-on-fight-to-end-fed-lending-programs-.html the ESF’s slush fund capability where the Treasury (via the Fed) directly injects cash it creates into corporations and industries that would otherwise fail. The usual ESF intention is to enrich Wall Street’s donor class first, then to prevent obsolete industries from collapsing, or industries in need of reform from reforming. As such the Exchange Stabilization Fund is the world’s foremost crony-capitalist operation.*

We’ve examined the unimpeachable case for CME COMEX manipulation of gold/silver spot prices on many occasions https://theduran.com/prosecuting-the-bank-of-big-almost/ (which America’s largest bank is criminally culpable for) but what about Bitcoin? Bitcoin is approaching 1/2 trillion USd in market cap, and the US Treasury (read: ESF) allows that. The Treasury allows that, not because “blockchain is robust”, but because 1/2 Tn USd in sterilized capital is more than convenient. Thus the ESF intersection with crypto is not transparent but is proven to exist.

On the night of the 20th of December, just as gold and silver spot rose inexorably in Asia on the trillion dollar news – then only to be smacked down – BTC was already experiencing a setback having set a new record at over $24K per published ledger line of code. BTC began trading down with gold and silver spot, just as the ESF began eliminating blocks to suppress BTC and support the dollar. When the dust settled, the ESF ended its BTC selling, and the code was $2K less per published block.

The importance of BTC to the ESF cannot be overestimated, calculated, or even imagined. BTC is the perfect haven for inflationary USd that would otherwise flood inflationary pockets that the Fed must instead extinguish. That’s because the currency created is intended to support US share markets and corporations, and to provide US dollar liquidity in foreign markets. For those dollars to end up in the pockets of people who really need them, for basics like rent and food for example, is not the intention of US Congress or the US Treasury.

Regarding BTC. During the new regime (yes, it will happen) Janet Yellen, the new ‘leader’ of the ESF, will find BTC to be of intense interest. That’s because the ESF will play BTC just like it has played gold and silver spot for many years now. The ESF can burn up inflationary dollars with BTC when needed, or can sterilize capital, or support the dollar US when needed. Just watch and see. The foregoing will generate a lot of controversy. But the above is not a promise. It is a guarantee.

Steve Brown

Steve Brown is the author of « Iraq: the Road to War » (Sourcewatch) editor of « Bush Administration War Crimes in Iraq » (Sourcewatch) « Trump’s Limited Hangout » and « Federal Reserve: Out-sourcing the Monetary System to the Money Trust Oligarchs Since 1913 ». Steve is an antiwar activist, a published scholar on the US monetary system, a prominent analyst and has appeared as guest contributor to The Duran, Fort Russ News, Strategika51, and the Herland Report.

Twitter: @newsypaperz


*That scope has been expanded over many years.
** Mussolini called State-controlled capitalism a form of fascism, while Hayek simply considered it one type of totalitarianism.

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