Part 7/16:
Preston delves into how the Federal Reserve and policymakers are actively manipulating markets to prevent total collapse. For example, they have employed yield curve control to keep interest rates artificially high for banks' bonds while forcing the broader public to endure high mortgage and loan rates—around 7–8%. This creates an illusion of stability while underlying vulnerabilities grow.
Additionally, the discussion touches on the use of leverage by hedge funds—some operating with 500x leverage—to buy large volumes of treasuries and hedge against risk through derivatives. This precarious setup is highly volatile; Preston warns that volatility and market shocks could trigger a cascade of failures, forcing the authorities into massive interventions once again.