by Gregory Mannarino
On 24 April, Treasury Secretary Steve Mnuchin affirmed what I stated would happen over a month ago: “The U.S. government will be taking stakes in energy companies.”
Mnuchin’s statement was backed by President Trump, who stated: “The energy companies need help.”
Keep in mind these are publicly traded companies which have been involved in massive stock buy back programs for years (buying shares of their own companies) – but now they “need help”?
Understanding the bigger picture is simple: Energy is a key component of the financial markets, so if energy companies are “propped up,” it gives the entire stock market a boost. This boost to the financial markets is made greater by propping up the price of crude oil, as well.
Recently, we witnessed a major drop in the price of crude followed by an historic run higher after President Trump threatened to militarily strike Iranian targets. In fact, immediately after the President’s threat, crude oil achieved an unprecedented gain of over 40 percent in just two days.
What Is Really Going On?
By the “government” taking stakes in energy companies (effectively nationalizing them), it puts a hard floor under the energy sector, which also puts a floor under the entire stock market. Also, this action removes price discovery and any semblance of a free market.
Crude Oil is the Lifeblood of the Financial Markets
The energy and financial sectors of the market are dependent on the price of crude oil being high. High crude prices allow energy companies to reap larger profits; of course, banks providing the financing also benefit. Moreover, the Wall Street investment banks have massive investments in crude oil itself. This results in high crude prices providing a win-win for both the energy companies and the investment banks.
Look Here, Not There
The present state of the U.S. economy is we have no economy.
The illusion of the stock market keeps people in a deliberately-induced state of perpetual distraction. The mainstream media outlets, which are all fed the same script, have the masses focusing on stock market gains as the economy free-falls, tens of millions lose their jobs, and small businesses shutter forever.
Every effort will be made to nationalize corporations – especially energy producers. This action allows the government to pick the winners (large corporations) and create the losers (U.S. small businesses).
Government nationalizing/taking stake in energy companies is a ploy not only to prop up the stock market in a dead economy, but also to advance its real agenda: National Socialism in the New America.
Welcome to the New World Order.
ENERGY: A KEY TO THE FINANCIAL MARKETS
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by Gregory Mannarino