If the US is stock buying futures, what does that mean?

This is to follow up on the previous post that the US government may have been buying futures to artificially increase the stock market. In the following, I give a hypothetical scenario if the government had bought futures, and when the positions expired, what would happen.

Suppose the US government may have put bought index futures at some date a couple of years away. Given a margin requirement of say...10%, 100 billion worth of futures over 6 months would translate into some $1 trillion of buying power.

When people buy these futures, the sellers will have to buy the index to hedge their positions. They would buy 1 trillion dollars worth of stock so they might deliver these to the government some years away.

So, what happens when the government closes out their positions by offsetting at some earlier date. Well, the opposite happens, there will be no buying power and a lot of shorts. In fact, all the institutions which took the other side of the trade don't have to hold their stocks any more and will more likely sell the positions. As we approach the futures date, we will get a lot of selling, to the tune of a trillion dollars of selling power in the stock market.

When closing out futures contract, the government could theoretically take delivery, but that would translate them into putting up even more money for the basket of stocks they take delivery for. This won't happen. I don't know how the treasury could justify a hundreds of additional billions to congress just to purchase stock.

The last option is that they could roll over the futures position to an even further date. The government would close out, the counter parties sells one trillion worth of stocks, and reopen, the counter parties buy another one trillion worth of stocks. Nothing much except a flat and choppy market would ensue in this case.

Either the treasury/fed could perpetuate the positions or close them out.

Possible manipulation on the stock market by US government?

Usually I tend not to write about this kind of speculative thing, but I find this rally fishy and evidence presented by zerohedge, although circumstantial, shows most of the rally since September 2009 has taken place in the after hours. The data might be coincidence, but yes, the US government boosting stock prices through buying futures would be a perversion of government intervention in free markets and this is showing the world that the stock market can be gamed through the futures market.

The world has believed that investing is something that is based on the performance of companies and economies. If they have to account for whether or not the government will buy or sell futures to game the market, then basically they will have wrecked decades of faith and trust by the public in markets. More people will know that the market is really a gamble and investing will have become a thing of the past. Why would people invest in the market if they know that it can be manipulated?

Of course, this after hours manipulation might just be nothing but an anomally but hopefully this thing gets sorted out or people will just lose faith.