BREAKING: Rapper Diddy has been accused of sex trafficking and assault in a lawsuit filed in a New York court.

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Silver 👀

BREAKING: A letter is going out to soldiers which says, “former Soldiers who were involuntarily separated for refusal to receive the COVID-19 vaccination may request a correction of their military records.”

It also says “Individuals who desire to apply to return to service should contact their local Army, US Army Reserve (USAR) or Army National Guard (ARNG) recruiter for more information.”

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If I don't get a chance to say it #HappyThanksGiving and #EnJoyTheShow

BREAKING: Train reportedly carrying thousands of gallons of diesel fuel derailed in northwest Atlanta, Georgia.

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https://www.cnn.com/2020/12/07/investing/wall-street-biden-trump-regulation-fsoc/index.html #FutureProvesPast

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Is this the Marker that their Reign is Over and Our nations re-birth is days away

Fortune Magazine 2000 “There’s a John F. Kennedy-type charisma that’s very hard to put your finger on,” Stone told me later on, when I asked him to describe Trump the politician. “He’s probably the best speaker on the circuit.”

But the Fed isn’t an ordinary bank. It’s a fiat money‐​issuing central bank acting on the federal government’s behalf; and such a bank can technically function with no capital at all, and even with negative capital. Unlike an ordinary bank’s liabilities, the Fed’s “liabilities” are (in John Exter’s immortal words), “IOU nothings.” The Fed never has to redeem them, except by replacing worn notes with new ones and that sort of thing. If its earnings fall short of its expenses, it can just “print” the difference. It follows that it might remain a going concern even if most of its assets weren’t worth diddley. Nor, as Nathan Tankus points out, is there a “statute, court case or any other binding legal constraint… that requires the Federal Reserve to have a positive net worth.”

In short, and speaking generally, the Fed can “lever‐​up” all it likes without a Treasury backstop. The sole caveat is that, if its losses are so great that the present discounted value of its future net earnings is itself negative, it can lose control of inflation. That could happen were the Fed to disburse “helicopter money” on a grand enough scale, or were it forced by the U.S. Treasury to accept a deposit of several trillion‐​dollar platinum coins. But it’s unlikely to happen otherwise.

Finally, from a consolidated government balance sheet perspective, there is little practical difference between $1 trillion in lending financed entirely by Congress and $1 trillion in lending financed mostly or entirely by the Fed. In one case the Treasury issues more debt to finance the lending; in the other, the Fed’s liabilities, including bank reserves on which it pays interest, increase. The necessary amounts are borrowed either way, with the Treasury ultimately bearing the interest burden. The only real difference is that, when the Treasury’s own liabilities increase, so does the federal debt, whereas when the Fed’s liabilities increase, the federal debt stays the same. In other words, to the extent that it isn’t backstopped, Fed‐​funded lending is “off budget.”

Though no law calls for the Fed to be in the black, or otherwise limits its total lending capacity in any direct fashion, the Fed’s lending, and its Section 13(3) lending in particular, is subject to important legal limits. The most obvious of these are to be fund in Section 13(3) itself, as amended by the Dodd‐​Frank Act.

In answering the question, “Is Treasury investment in the Fed’s emergency lending necessary?,” Peter Conti‐​Brown observes in a Brookings article that “Nowhere in any part of the Federal Reserve Act does Fed lending require Treasury participation, nor did Congress prevent the Fed from taking losses in its emergency lending. ” The first part of this statement is true, so far as it goes. But the second is at best only a half truth. In defending it Peter notes that, although the law calls for the Fed’s 13(3) lending to be “indorsed or otherwise secured” to the lending Fed bank’s satisfaction, this falls short of dictating that “the Fed avoid taking first losses in an emergency lending facility.” But he overlooks another Section 13(3) clause—13(3)(b)(i)—according to which the Fed must see to it “that the security for emergency loans is sufficient to protect taxpayers from losses.” “It seems to me,” I said in our Twitter exchange, “that this can be taken to mean that the Fed isn’t supposed to lose money.”

Congress, on the other hand, is mostly free to dispose of taxpayers’ money as it sees fit. That includes appropriating funds for the specific purpose of covering losses from insufficiently secured Fed loans. The Fed can, in other words, lose money to the extent that Congress has appropriated money for it to lose, but not otherwise. Treasury backstops sanctioned by Congress are nothing other than such appropriations.

That, I submit, is the real rationale for Treasury backstopping of risky Fed lending. But to defend this view, I must trace that rationale’s roots beyond the Federal Reserve Act, to their underpinnings in the U.S. Constitution.