Forwarded from The General
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.”
@GeneralMCNews
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.”
@GeneralMCNews
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Forwarded from The General
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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
CNN
Trump regulators leave a warning for the Biden team | CNN Business
As they head out the door, Trump-led financial regulators are warning the incoming Biden team that a little-known yet critical corner of Wall Street is broken.
Forwarded from Stacy (Qrash The Matrix)
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More videos in thread
https://twitter.com/volcaholic1/status/1725483439464317430?t=nivMK_qrXkzEFTSC652isQ&s=19
https://twitter.com/volcaholic1/status/1725483439464317430?t=nivMK_qrXkzEFTSC652isQ&s=19
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.”
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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.
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.
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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.”
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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.
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.
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Constitutional Underpinnings
Because those underpinnings are very clearly explained in “Congress’ Power of the Purse,” a 1988 Yale Law Review article by Kate Stith, I need only summarize them here. Stith’s lengthy article is loaded with supporting evidence and arguments.
By stipulating that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law,” the Constitution, Stith observes, “places the power of the purse in Congress.” That assignment of power, she adds, “is at the foundation of our constitutional order,” for it’s by controlling the things on which public monies are spent that Congress “defines the contours of the federal government.”
Congress’ power of the purse has as corollaries two “governing principles.” The first, which Stith calls the “Principle of the Public Fisc,” “assert[s] that all monies received from whatever source by any part of the government are public funds.” The other is a “Principle of Appropriations Control” that “prohibit[s] expenditure of any public money without legislative authorization.” Together these principles imply that “Agencies and officials of the federal government may not spend monies from any source, private or public, without legislative permission to do so.” Congress, on the other hand, has not only the power but the duty to exercise legislative control over federal expenditures. “If Congress permits the Executive access to the public fisc without effective appropriations control [it] abdicates, rather than exercises, its power of the purse.”
Furthermore, Stith claims,
it is not enough for Congress to direct federal agencies to produce a better world. …Congress must affirmatively authorize the funds to do the job. …Even where the President believes that Congress has transgressed the Constitution by failing to [fund some] activity, the President has no constitutional authority to draw funds from the Treasury to finance the activity. Spending in the absence of appropriations is ultra vires.
Finally, and crucially,
Where Congress thus denies appropriations, the denial is not merely a determination that the public fisc cannot afford spending any money on that activity. By such appropriations legislation, Congress decides that, under our constitutional scheme, for the duration of the appropriations denial, the specific activity is no longer within the realm of authorized government actions.
Because those underpinnings are very clearly explained in “Congress’ Power of the Purse,” a 1988 Yale Law Review article by Kate Stith, I need only summarize them here. Stith’s lengthy article is loaded with supporting evidence and arguments.
By stipulating that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law,” the Constitution, Stith observes, “places the power of the purse in Congress.” That assignment of power, she adds, “is at the foundation of our constitutional order,” for it’s by controlling the things on which public monies are spent that Congress “defines the contours of the federal government.”
Congress’ power of the purse has as corollaries two “governing principles.” The first, which Stith calls the “Principle of the Public Fisc,” “assert[s] that all monies received from whatever source by any part of the government are public funds.” The other is a “Principle of Appropriations Control” that “prohibit[s] expenditure of any public money without legislative authorization.” Together these principles imply that “Agencies and officials of the federal government may not spend monies from any source, private or public, without legislative permission to do so.” Congress, on the other hand, has not only the power but the duty to exercise legislative control over federal expenditures. “If Congress permits the Executive access to the public fisc without effective appropriations control [it] abdicates, rather than exercises, its power of the purse.”
Furthermore, Stith claims,
it is not enough for Congress to direct federal agencies to produce a better world. …Congress must affirmatively authorize the funds to do the job. …Even where the President believes that Congress has transgressed the Constitution by failing to [fund some] activity, the President has no constitutional authority to draw funds from the Treasury to finance the activity. Spending in the absence of appropriations is ultra vires.
Finally, and crucially,
Where Congress thus denies appropriations, the denial is not merely a determination that the public fisc cannot afford spending any money on that activity. By such appropriations legislation, Congress decides that, under our constitutional scheme, for the duration of the appropriations denial, the specific activity is no longer within the realm of authorized government actions.
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Before the establishment of the Federal Reserve in 1913, the United States Treasury played a more direct and prominent role in certain aspects of monetary policy and financial management. The absence of a central bank meant that the Treasury Department had to perform functions that are now typically associated with central banks. Here are some key aspects of the U.S. Treasury's role before the Federal Reserve Act of 1913:
Issuance of Money: The U.S. Treasury was responsible for issuing paper currency and coins. It played a central role in determining the amount of money in circulation, although the overall money supply was also influenced by the private banking sector.
Management of Government Finances: The Treasury managed the financial operations of the federal government, including collecting revenues, making payments, and handling the government's accounts. It was directly involved in fiscal policy and had to navigate the challenges associated with funding government expenditures.
Banking Functions: Without a central bank, the Treasury acted as the government's banker. It held the government's deposits and conducted financial transactions on behalf of the government.
Stabilization Efforts: In the absence of a central bank with specific tools for monetary policy, the Treasury attempted to stabilize the financial system and address economic challenges through various means, including the use of gold reserves.
Issuance of Money: The U.S. Treasury was responsible for issuing paper currency and coins. It played a central role in determining the amount of money in circulation, although the overall money supply was also influenced by the private banking sector.
Management of Government Finances: The Treasury managed the financial operations of the federal government, including collecting revenues, making payments, and handling the government's accounts. It was directly involved in fiscal policy and had to navigate the challenges associated with funding government expenditures.
Banking Functions: Without a central bank, the Treasury acted as the government's banker. It held the government's deposits and conducted financial transactions on behalf of the government.
Stabilization Efforts: In the absence of a central bank with specific tools for monetary policy, the Treasury attempted to stabilize the financial system and address economic challenges through various means, including the use of gold reserves.