The Fed told Congress it would buy stocks if Congress allowed it. This statement has caused a lot of people to scratch their heads. Will this cause all the stock bears to rethink their prognostications of a major stock market crash? This was not even on the radar of most people.

Some have reported this story as “the first time in U.S. history” that the Federal Reserve has openly spoken about purchasing of stocks rather than bonds and mortgage-backed securities. While this news may have been shocking to most, South Carolina Republican Mick Mulvaney asked Janet Yellen before the House Financial Services Committee about the Fed’s authority to buy stocks to stimulate the economy. Mulvaney asked:

“There’s been some attention in the last few months about the recent decision by the Bank of Japan to start purchasing equities and my question to you is fairly simple. Is the United States Federal Reserve looking at the possibility of adding the purchase of equities to its tool box as it looks at monetary policy?”

Yellen answered:

“Well, the Federal Reserve is not permitted to purchase equities. We can only purchase U.S. treasuries and agency securities. I did mention in a speech in Jackson Hole, though, where I discussed longer term issues and difficulties we could have in providing adequate monetary policy. Accommodation may be somewhere in the future, down the line that this is the kind of thing that Congress might consider, but if you were to do so, it’s not something that the Federal Reserve is asking for.”

This response shook many on Wall Street. It is true that buying equities has been a part of Japan’s effort to stimulate its economy. We will most likely see this tool attempted by Draghi on Europe since he has run out of things to do. But let’s put this all in perspective. Even China bought US equities, as have other central banks, to diversify since all they can do is have dollar debt given the collapse of the euro and the lack of central European debt. Yet, that is not even the issue at hand.

When the Fed was first established to stimulate the economy during a downdraft, the Fed bought ONLY private corporate paper. It was because of World War I that Congress ordered the Fed to buy only government debt to help fund the war. That was NEVER put back after World War I. Then during World War II, Congress ordered the Fed to SUPPORT government debt at 100% par. That they repealed in 1951.

You can see here in our chart of the US bond market back to inception that there was an immediate surge when the World War began in Europe as capital fled to the USA. Then you see the lows holding a steady line. That was the order to support the US federal bond market. You then see the bonds crash into 1981 (note: blue labels market the start of the issue used 30 year bonds).

Everyone is shocked that Yellen did not say no to buying equities, but a little history is required to understand that it is Congress — not the Fed — who dictates what they can and cannot buy.

CNBC came out and said it is breaking its non-endorsement policy to say Trump is unfit. While the press should never endorse anyone, this election is revealing just how corrupt the press really is. They are conspiring against the people, if not the entire world, to maintain politics as-is. Yahoo reported, “Getty Images Investor Howard Marks is backing Hillary Clinton even though he doesn’t see her as the agent of change the country needs.” This is clearly smelling like BREXIT where all the press predicted the collapse of Britain if the people did not surrender their sovereignty to Brussels.

The press is owned by big business and that is the entire problem. All they do is preach their own book. They rely on government for all sorts of perks. Even Michael Bloomberg has said he would endorse Hillary. The Arizona Republic endorsed Hillary saying she was the “only choice.” Only four newspaper have endorsed Trump: National Enquirer (March 8, 2016), New York Observer (April 12, 2016), New York Post (April 14, 2016), and  Santa Barbara News-Press (June 2, 2016).

The overwhelming endorsement of Hillary despite all the scandals explains why the press will NOT press Hillary for any real issues regarding her health or conflicts of interest with the Clinton Foundation receiving money from foreign governments in return for her approval of arms deals. This reflects a very serious issue. We may perhaps witness the collapse of this media as the younger generation turns to the internet rather than mainstream media.

Newspaper Endorsing Hillary:

Newspaper State Endorsement date Ref.
Storm Lake Times Iowa January 12, 2016
The Portsmouth Herald New Hampshire January 15, 2016
Foster’s Daily Democrat (Dover) New Hampshire January 15, 2016
The Des Moines Register Iowa January 23, 2016
Sioux City Journal Iowa January 23, 2016
Concord Monitor New Hampshire January 24, 2016
The Boston Globe Massachusetts January 24, 2016
The Keene Sentinel New Hampshire January 28, 2016
The Conway Daily Sun New Hampshire January 29, 2016
Iowa City Press-Citizen Iowa January 29, 2016
The New York Times New York January 31, 2016
Monadnock Ledger-Transcript New Hampshire February 4, 2016
The Dallas Morning News Texas February 12, 2016
Tampa Bay Times (St. Petersburg) Florida February 12, 2016
Houston Chronicle Texas February 12, 2016
San Antonio Express-News Texas February 12, 2016
Las Vegas Sun Nevada February 14, 2016
Falls Church News-Press Virginia February 18, 2016
Jewish Herald-Voice (Houston) Texas February 18, 2016
The Greenville News South Carolina February 19, 2016
Corpus Christi Caller-Times Texas February 21, 2016
The Free Lance–Star (Fredericksburg) Virginia February 25, 2016
Star Tribune (Minneapolis) Minnesota February 26, 2016
Fort Worth Star-Telegram Texas February 26, 2016
Detroit Free Press Michigan February 28, 2016
Barre Montpelier Times Argus Vermont February 28, 2016
Rutland Herald Vermont February 28, 2016
Chattanooga Times Free Press
(Times editorial) Tennessee February 28, 2016
Portland Press Herald Maine March 1, 2016
Indy Week (Durham) North Carolina March 2, 2016
Detroit News Michigan March 3, 2016
Miami Herald Florida March 3, 2016
Michigan Chronicle (Detroit) Michigan March 3, 2016
Orlando Sentinel Florida March 4, 2016
Omaha World-Herald Nebraska March 4, 2016
Kane County Chronicle (St. Charles) Illinois March 4, 2016
Sun-Sentinel (Fort Lauderdale) Florida March 4, 2016
The Charlotte Observer North Carolina March 5, 2016
Chicago Sun-Times Illinois March 5, 2016
The Clarion-Ledger (Jackson) Mississippi March 5, 2016
Northwest Herald (Crystal Lake) Illinois March 5, 2016
Jackson Advocate Mississippi March 6, 2016
St. Louis Post-Dispatch Missouri March 6, 2016
The Michigan Daily (Ann Arbor) Michigan March 8, 2016
The St. Louis American Missouri March 9, 2016
South Florida Gay News (Wilton Manors) Florida March 9, 2016
The Cincinnati Enquirer Ohio March 10, 2016
The Plain Dealer (Cleveland) Ohio March 10, 2016
Akron Beacon Journal Ohio March 10, 2016
The Palm Beach Post Florida March 11, 2016
The Missouri Times (Jefferson City) Missouri March 11, 2016
Journal Star (Peoria) Illinois March 13, 2016
The Arizona Republic Arizona March 18, 2016
Idaho Statesman Idaho March 20, 2016
Rolling Stone New York March 23, 2016
Wisconsin Gazette (Milwaukee) Wisconsin March 24, 2016
The Spokesman-Review (Spokane) Washington March 25, 2016
New York Amsterdam News New York March 31, 2016
City Newspaper (Rochester) New York April 5, 2016
The Register-Guard (Eugene) Oregon April 10, 2016
New York Daily News New York April 12, 2016
New York Observer New York April 14, 2016
Newsday (Melville) New York April 15, 2016
The Post-Standard (Syracuse) New York April 15, 2016
The Post-Star (Glens Falls) New York April 16, 2016
The Day (New London) Connecticut April 17, 2016
The Providence Journal Rhode Island April 17, 2016
Times Union (Albany) New York April 17, 2016
The Philadelphia Inquirer Pennsylvania April 17, 2016
Hartford Courant Connecticut April 17, 2016
New Pittsburgh Courier Pennsylvania April 21, 2016
Philadelphia Daily News Pennsylvania April 22, 2016
The Baltimore Sun Maryland April 25, 2016
The Charleston Gazette-Mail West Virginia April 26, 2016
The Sacramento Bee California May 4, 2016
Lexington Herald-Leader Kentucky May 5, 2016
The Desert Sun (Palm Springs) California May 6, 2016
Washington Blade Washington, D.C. May 10, 2016
Los Angeles Times California May 13, 2016
San Jose Mercury News California May 20, 2016
The Fresno Bee California May 21, 2016
The Santa Fe New Mexican New Mexico May 28, 2016
Daily Bruin (University of California,
Los Angeles) California May 30, 2016
The San Diego Union-Tribune California June 2, 2016