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Taiwan’s government said it will withdraw money from its National Stabilization Fund to keep stock prices from falling further after they already have lost about $340 billion in value this year.
The fund was established in 2000 to combat market turmoil caused by “significant occurrences at home or abroad” or “large-scale movements of international capital” that adversely affect equity values.
This is the eighth time the fund has inserted itself into the market. It last jumped into action in March 2020 as the COVID War began, spending $25 million to buy shares of 19 companies and eventually making about $7.8 million in profit when it sold back its holdings.
It also went to work in 2008 during the Great Recession, in 2011 amid Europe’s debt crisis, and again in 2015 when China’s stock markets crashed.
The fund holds about $16.7 billion borrowed from pension funds, financial institutions, and postal savings accounts.
The government refused to specify how much money it would deploy now to prop up the country’s stock market.
The country’s main stock index jumped up 2.7 percent on 13 July on the government’s announcement.
Taiwan’s share prices have fallen as many investors have forsaken stocks and are seeking safer stores of value amid the war in Ukraine, rampaging inflation, and rising interest rates, The Wall Street Journal said.
About $32 billion has left the country’s stock market so far this year, compared to $15 billion through all of 2021 and $18 billion in 2020.
TREND FORECAST: As we note above in our Economic Overview and have reported in many previous issues of The Trends Journal… the game is rigged.
Taiwan’s emergency fund had overtly interfered with the country’s stock market.
As we have noted in the past, stock markets have a symbolic value as well as a financial one.
If a stock market crashes, investors and the public in general assume that a country’s entire economy has collapsed, which may or may not be true. Often, the assumption can become a self-fulfilling prophecy.
So, while Taiwan’s government had a pragmatic reason to insert itself into the stock market, the move also demonstrates the fact that equity markets are manipulated by governments at their whim to achieve political, not solely economic, objectives.
Back in 2018 when Shanghai Composite Index was down more than 30 percent, the Chinese National Team intervened to artificially prop the equities back up.
In the U.S. same gang of market riggers, different name. Regardless of the country, the governments will do all they can to artificially pump up failing equities.
Moreover, should the market declines intensify, The U.S. Plunge Protection Team, the Chinese National Teams and other world “Teams,” plus the central banksters, will coordinate market manipulation strategies in attempts to reverse and/or minimize the selloffs anyway they can.