Chinese-style market-rigging on US menu

THE world — especially as it relates to stock markets — really is a small place.

Case in point: The Chinese government rigged its stock market before trading began this week. And that, in turn, helped US equities stage a strong rally on Monday.

The news about China came courtesy of Bloomberg, which reported from Asia that “over the weekend, the China Securities Regulatory Commission and other regulators sent informal directives to some major stockholders encouraging them to purchase more shares in the mainland-listed firms they invest in.”

The term “informal” really doesn’t apply to the Chinese government. Its requests are really commands.

Quoting anonymous sources, Bloomberg also said that Chinese officials called some mutual funds and told them “to avoid being net sellers of equities as well.”

And just in case any investors wanted to go rogue and defy the gov- ernment, “brokerages were also asked to provide trading summaries from last week” and give their “trading plans and previews for this week.”

In a column last week, I explained how countries like China and Japan overtly rig their stock markets. And I also walked you through my — and other people’s — suspicions that the same drill happens in the US.

Only here, it’s a little more mysterious.

As I explained, a long time ago, it was proposed that the Federal Reserve should rig the US stock market in times of emergency through the purchase of stock index futures contracts.

And the money for those purchases wouldn’t even have to come from Washington since a wink and nod to any number of major brokerage firms could set in motion big purchases of these futures contracts. And that, in turn, would reverse a sagging stock market.

We aren’t as obvious with our stock market riggings because we are supposed to believe in free markets with equity prices rising and falling on their own merits rather than because of government decree.

But there are a lot of things that aren’t supposed to happen in this country but do.

Investors would undoubtedly cheer anything that keeps their stock prices from going to hell. But the problem is that market rigging usually only delays the inevitable.

So even though stocks had a nice gain on Monday in China and in the US, there is one problem that neither government can wish away — rising interest rates and inflation.

Even as stock markets were recovering from last week’s disaster, the bond market was still declining. And that automatically caused interest rates to climb. The US government’s 10-year bond, for instance, was closing in on 2.9 percent.

If the rate on that security reaches 3 percent — and it will if investors continue to believe the world economy is strengthening and inflation will increase — the stock market will have additional problems.

World governments have rigged the bond market for a long time. Even the US does so without any shyness, as we saw during the quantitative easing (QE) experiments by the Fed.

In the end, any rigging of the stock market will run right into the full force of rising interest rates. It’s going to be one helluva collision. Again, if you are investing in US financial markets, keep a close eye on developments regarding the FBI and the Hillary Clinton e-mail investigation. The markets don’t like chaos, and that’s what we are headed for.

There have been a lot of major developments recently, although most big media organizations are ignoring them. They will soon regret that.

For now, I’d like to point out one development from recently released e-mails between those cheating FBI lovebirds, Peter Strzok and Lisa

Page. Nobody seems to have caught this, so allow me.

In June 2016 Strzok messaged Page to say this about Clinton’s e-mails: “She also used her personal e-mail extensively while outside the US, including from the territory of sophisticated adversaries.”

The Strzok e-mails continued: “That use included an e-mail exchange with another senior government official while Secretary Clinton was in the territory of such an adversary. Given that combination of factors, we assess it is possible that hostile actors gained access to Secretary Clinton’s personal e-mail accounts.”

I broke this story more than a year ago. Clinton’s e-mails were not “hacked” in the traditional sense. Her password was stolen while she was visiting Moscow and her carelessness allowed the Russians to read her messages for years.

The original Strzok e-mail apparently disclosed that the “senior government official” mentioned was actually President Obama. And that made Clinton’s carelessness worse.

But the key point here is this: If the Russians didn’t “hack” Clinton in the strict sense, it seems to me that it becomes less likely that they broke into the computers of the Democratic National Committee and its higher-ups before Election Day.

Why would the Russians go after Democratic nobodies when they were easily and constantly eavesdropping on Clinton’s emails?

So, who broke into the DNC computers? My best guess right now is that the DNC e-mail leak came from a disgruntled Democratic Party insider — perhaps a Bernie Sanders supporter. When we find out who the leaker was, all hell will break out.

Again, everything happening in Washington right now is crucial to the well-being of an already nervous Wall Street. So pay attention.