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03-15-2017, 02:51 PM
(This post was last modified: 03-15-2017, 02:52 PM by Mikebert.)
(03-14-2017, 06:24 PM)Kinser79 Wrote: Or perhaps, and this may sound crazy but it's been done before....since the treasury can issue notes bearing interest then surely they can also issue non-interest bearing notes of non-debt.
https://en.wikipedia.org/wiki/United_States_Note
While potentially radical and possibly subject to abuse it would solve the bill paying problem.
I don't think so. What private party would buy non-interest-bearing paper in a world of still positive inflation? The Fed is barred by law, I believe, from doing this.
The last time we had one of these it was non-event that the market completely ignored. Looks like they are ignoring this one too. I will point out that the market also ignored Y2K, which led me to believe it was going to be a non-event, which it was.
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(03-15-2017, 02:37 PM)Kinser79 Wrote: (03-15-2017, 02:18 PM)SomeGuy Wrote: (03-15-2017, 02:14 PM)X_4AD_84 Wrote: Welp ... no more QE for now.
Rates are going up, not down.
Should be an interesting ride.
Its a quarter point. Considering how low and how long interest rates have been it's about time. It might move some of that QE cash out of the stock market and into the real economy. I'm more interested though in the other 15 March event, the Dutch Election. It could spell the prelude of the other 2017 elections in Europe (France and Germany).
I'm not claiming the collapse of the economy tomorrow. Stopped doing that one a while ago. Recession is still likely at some point during Trump's (first?) term.
Am less interested in the Dutch election. Wilder's PVV may or may not do better than last time, but there is no possibility of him becoming Prime Minister this election, so it's only of moderate interest.
How Le Pen does a few months later is much more interesting. Fillon is under formal investigation (and not dropping out, as per his promise) and the Left's big hope is... an investment banker.
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(03-15-2017, 02:51 PM)Mikebert Wrote: (03-14-2017, 06:24 PM)Kinser79 Wrote: Or perhaps, and this may sound crazy but it's been done before....since the treasury can issue notes bearing interest then surely they can also issue non-interest bearing notes of non-debt.
https://en.wikipedia.org/wiki/United_States_Note
While potentially radical and possibly subject to abuse it would solve the bill paying problem.
I don't think so. What private party would buy non-interest-bearing paper in a world of still positive inflation? The Fed is barred by law, I believe, from doing this.
The last time we had one of these it was non-event that the market completely ignored. Looks like they are ignoring this one too. I will point out that the market also ignored Y2K, which led me to believe it was going to be a non-event, which it was.
Mike....
United States Notes were not paper that were bought. They were paper that the treasury issued. For Example: Government wants to buy a pound of steel (it doesn't matter why or for what reason it just does) the cost is X dollars. So the government buys it and pays in United States Notes for X dollars.
Would it lead to positive inflation? Sure. But if this is an acutal event I don't think inflation would be the key concern here. But it would definately prove that the debt ceiling is nonsense and would put pressure on the Federal Reserve Bank. Which I would like to point out is neither federal, nor a reserve and probably isn't even a bank.
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03-15-2017, 03:03 PM
(This post was last modified: 03-15-2017, 03:04 PM by Mikebert.)
I read the article. Sigh, it's just too good to be true.
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(03-15-2017, 03:01 PM)Kinser79 Wrote: (03-15-2017, 02:51 PM)Mikebert Wrote: (03-14-2017, 06:24 PM)Kinser79 Wrote: Or perhaps, and this may sound crazy but it's been done before....since the treasury can issue notes bearing interest then surely they can also issue non-interest bearing notes of non-debt.
https://en.wikipedia.org/wiki/United_States_Note
While potentially radical and possibly subject to abuse it would solve the bill paying problem.
I don't think so. What private party would buy non-interest-bearing paper in a world of still positive inflation? The Fed is barred by law, I believe, from doing this.
The last time we had one of these it was non-event that the market completely ignored. Looks like they are ignoring this one too. I will point out that the market also ignored Y2K, which led me to believe it was going to be a non-event, which it was.
Mike....
United States Notes were not paper that were bought. They were paper that the treasury issued. For Example: Government wants to buy a pound of steel (it doesn't matter why or for what reason it just does) the cost is X dollars. So the government buys it and pays in United States Notes for X dollars.
Would it lead to positive inflation? Sure. But if this is an acutal event I don't think inflation would be the key concern here. But it would definately prove that the debt ceiling is nonsense and would put pressure on the Federal Reserve Bank. Which I would like to point out is neither federal, nor a reserve and probably isn't even a bank.
Yes and that is what is barred by law.
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US Notes are still legal tender, and are not issued by the Fed. They're issued by the Treasury.
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(03-15-2017, 03:04 PM)Mikebert Wrote: (03-15-2017, 03:01 PM)Kinser79 Wrote: (03-15-2017, 02:51 PM)Mikebert Wrote: (03-14-2017, 06:24 PM)Kinser79 Wrote: Or perhaps, and this may sound crazy but it's been done before....since the treasury can issue notes bearing interest then surely they can also issue non-interest bearing notes of non-debt.
https://en.wikipedia.org/wiki/United_States_Note
While potentially radical and possibly subject to abuse it would solve the bill paying problem.
I don't think so. What private party would buy non-interest-bearing paper in a world of still positive inflation? The Fed is barred by law, I believe, from doing this.
The last time we had one of these it was non-event that the market completely ignored. Looks like they are ignoring this one too. I will point out that the market also ignored Y2K, which led me to believe it was going to be a non-event, which it was.
Mike....
United States Notes were not paper that were bought. They were paper that the treasury issued. For Example: Government wants to buy a pound of steel (it doesn't matter why or for what reason it just does) the cost is X dollars. So the government buys it and pays in United States Notes for X dollars.
Would it lead to positive inflation? Sure. But if this is an acutal event I don't think inflation would be the key concern here. But it would definately prove that the debt ceiling is nonsense and would put pressure on the Federal Reserve Bank. Which I would like to point out is neither federal, nor a reserve and probably isn't even a bank.
Yes and that is what is barred by law.
Not quite. In 1997 Congress removed the requirement for the Treasury to keep them on hand. And they fell out of use in 1971--I've not seen a law so it may be an Executive Order and you know about EOs...
In any event unless Congress passed a law prohibiting the Treasury from issuing United States Notes they could do so if they so chose. The Riegle Improvement Act only removed the requirement that they have some on hand.
(03-15-2017, 03:11 PM)SomeGuy Wrote: US Notes are still legal tender, and are not issued by the Fed. They're issued by the Treasury.
They still are legal tender, but the Treasury to my knowlege has not issue any since 1996 (by which time they had fallen out of use and were only of importance to those who collect paper currency).
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Quote:They still are legal tender, but the Treasury to my knowlege has not issue any since 1996 (by which time they had fallen out of use and were only of importance to those who collect paper currency).
Which does not preclude them issuing more in the future. The point was addressed to Mike's claim that this would not be possible due to laws against the Fed issuing such instruments. I was pointing out that that was not relevant.
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(03-15-2017, 02:53 PM)SomeGuy Wrote: (03-15-2017, 02:37 PM)Kinser79 Wrote: (03-15-2017, 02:18 PM)SomeGuy Wrote: (03-15-2017, 02:14 PM)X_4AD_84 Wrote: Welp ... no more QE for now.
Rates are going up, not down.
Should be an interesting ride.
Its a quarter point. Considering how low and how long interest rates have been it's about time. It might move some of that QE cash out of the stock market and into the real economy. I'm more interested though in the other 15 March event, the Dutch Election. It could spell the prelude of the other 2017 elections in Europe (France and Germany).
I'm not claiming the collapse of the economy tomorrow. Stopped doing that one a while ago. Recession is still likely at some point during Trump's (first?) term.
Am less interested in the Dutch election. Wilder's PVV may or may not do better than last time, but there is no possibility of him becoming Prime Minister this election, so it's only of moderate interest.
How Le Pen does a few months later is much more interesting. Fillon is under formal investigation (and not dropping out, as per his promise) and the Left's big hope is... an investment banker.
Wilder might not end up PM but he might still be able to push his agenda if the Coalition Government is weak. Le Pen is looking good, and Merkle's party isn't looking good for Germany.
As for recession? Yeah I expect one to happen--at least on Wall Street--don't know if it will hit the Real Economy though. Hence why I've been shorting my stocks since CNBC started calling a Trump Rally back in November.
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Speaking of "Le Pen looking good", apparently Marion Marechal-Le Pen got divorced last year and is back on the market.
![[Image: ql3042uvanxx.jpg]](https://i.redd.it/ql3042uvanxx.jpg)
*sigh*
Hope springs eternal. 
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(03-15-2017, 12:48 PM)The Wonkette Wrote: (03-14-2017, 03:12 PM)SomeGuy Wrote: I dunno, we have run into debt ceilings before. Let's hold off and see what actually happens, first.
The Government will take "extraordinary steps" to keep everything running until early summer, when those tricks won't work anymore. As SomeGuy has said, we've done this song and dance.
April 18 will be when things start to get interesting, because the Government's Continuing Resolution expires. So Congress will have to figure out at what level to fund the Government prior to that; otherwise, it is 2013 all over again (Government shutdown) until they get some kind of spending bill out. Once they figure that out, they'll also have to decide whether or not to raise the debt ceiling this summer.
Your analysis assumes that Trump will behave as everyone else has. Trump has a habit of doing the unexpected and that seems unlikely to change.
Democracy is the theory that the common people know what they want, and deserve to get it good and hard. -- H.L. Mencken
If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action. -- Ludwig von Mises
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(03-15-2017, 03:33 PM)SomeGuy Wrote: Speaking of "Le Pen looking good", apparently Marion Marechal-Le Pen got divorced last year and is back on the market.
*sigh*
Hope springs eternal.
If she put on some weight I'd consider heterosexuality. What is it with white women and being so damn scrawny?
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Quote:If she put on some weight I'd consider heterosexuality. What is it with white women and being so damn scrawny?
We are a delicate, graceful people. 
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(03-15-2017, 03:38 PM)Galen Wrote: (03-15-2017, 12:48 PM)The Wonkette Wrote: (03-14-2017, 03:12 PM)SomeGuy Wrote: I dunno, we have run into debt ceilings before. Let's hold off and see what actually happens, first.
The Government will take "extraordinary steps" to keep everything running until early summer, when those tricks won't work anymore. As SomeGuy has said, we've done this song and dance.
April 18 will be when things start to get interesting, because the Government's Continuing Resolution expires. So Congress will have to figure out at what level to fund the Government prior to that; otherwise, it is 2013 all over again (Government shutdown) until they get some kind of spending bill out. Once they figure that out, they'll also have to decide whether or not to raise the debt ceiling this summer.
Your analysis assumes that Trump will behave as everyone else has. Trump has a habit of doing the unexpected and that seems unlikely to change.
I've found with Trump when everyone else zigs he zags. Personally I think the major show down will be on Ryancare if it ever gets out of committee.
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I am always leery of commentators reading too much into things, but here is an interesting take.
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(03-15-2017, 03:47 PM)Kinser79 Wrote: (03-15-2017, 03:38 PM)Galen Wrote: (03-15-2017, 12:48 PM)The Wonkette Wrote: (03-14-2017, 03:12 PM)SomeGuy Wrote: I dunno, we have run into debt ceilings before. Let's hold off and see what actually happens, first.
The Government will take "extraordinary steps" to keep everything running until early summer, when those tricks won't work anymore. As SomeGuy has said, we've done this song and dance.
April 18 will be when things start to get interesting, because the Government's Continuing Resolution expires. So Congress will have to figure out at what level to fund the Government prior to that; otherwise, it is 2013 all over again (Government shutdown) until they get some kind of spending bill out. Once they figure that out, they'll also have to decide whether or not to raise the debt ceiling this summer.
Your analysis assumes that Trump will behave as everyone else has. Trump has a habit of doing the unexpected and that seems unlikely to change.
I've found with Trump when everyone else zigs he zags. Personally I think the major show down will be on Ryancare if it ever gets out of committee.
That will be when we find out if he can keep the GOP party elites in line because the base is pretty much behind him. If he can then the chances of passing his agenda and having a successful presidency are good.
Democracy is the theory that the common people know what they want, and deserve to get it good and hard. -- H.L. Mencken
If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action. -- Ludwig von Mises
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Looks like sitting center-right PM Mark Rutte's party is leading in exit polls, but lost seats. PVV looks like it picked up a few seats from last time, the Greens won "bigly" too, and the old center-left Labor party all but collapsed.
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(03-15-2017, 03:28 PM)SomeGuy Wrote: Quote:They still are legal tender, but the Treasury to my knowlege has not issue any since 1996 (by which time they had fallen out of use and were only of importance to those who collect paper currency).
Which does not preclude them issuing more in the future. The point was addressed to Mike's claim that this would not be possible due to laws against the Fed issuing such instruments. I was pointing out that that was not relevant.
Thanks, I was not aware of a money-issuing facility still operative today that was not the Fed. However, are this notes fiat currency that can be issued in unlimited quantities without backing, or at they required to be backed by specie? If the former, why wasn't this being discussed in previous debt brinkmanship times? We had such things as the platinum coin, which is pretty out of the box. Why not issuing notes?
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Quote:Thanks, I was not aware of a money-issuing facility still operative today that was not the Fed. However, are this notes fiat currency that can be issued in unlimited quantities without backing, or at they required to be backed by specie? If the former, why wasn't this being discussed in previous debt brinkmanship times? We had such things as the platinum coin, which is pretty out of the box. Why not issuing notes?
No problem. And no, US Notes are not and have never been backed by specie, though the government was occasionally willing to redeem them for such when asked. They're "greenbacks", Mike, come on!
As for why it wasn't discussed? I have no idea, probably for the same reason you just asked. People in the media hadn't thought of them. I have seen some mention of them on blogs and the like for about a decade now. If I am not mistaken, debt ceiling legislation specifically excludes US Notes from the debt ceiling calculation, despite them being in effect non-interest bearing instruments of credit.
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In regard to US Notes...It wasn't brought up in the MSM because that means that the US could attempt immediately to implement MMT to tackle the depression.
But I think the reason it really wasn't brought out is because the Fed simply doesn't want the competition. And except for the extremely old no one remembers a time before the Fed, and even then those extremely old were little kids. Toward the end in the Small Size notes Greenbacks looked much like federal reserve notes just with a red seal instead of green. (There were also blue seals for silver certificates, and yellow ones for gold certificates). A difference that a collector might notice but one that your average Joe wouldn't.
It also doesn't play in nicely with their kabuki theater that they've used for the past half-century or so.
It sounds exotic if one doesn't realize that the US does have a history with more than one type of money. Indeed myself I'd like to see the Federal Reserve abolished. After all Congress has the power to coin money so let them coin it.
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