TRUMP RUNS FED Next Stop: Out Of Town?
By Wayne Jett
On March 27, 2020, Bloomberg published an opinion describing new operations planned by the Federal Reserve and U. S. Treasury involving highly significant moves to finance, purchase and own commercial paper, corporate bonds, term asset-backed securities and to lend to medium-size and small businesses. This “… essentially merges the Fed and Treasury into one organization. So, meet your new Fed chairman, Donald J. Trump.” This is important news, even if the stated conclusion is not entirely accurate.
The potential for inaccuracy lies both in the facts reported and in the analytical conclusion, but more likely in the latter. Considering President Trump’s personal strength as chief executive of the federal government, the commentator is likely correct that the president would have his way with use of the new “special purpose vehicles (SPVs).” Under other presidents we have seen, the Fed would almost surely have its way. This somewhat helter-skelter arrangement could enable encroachment of private pecuniary interests – even the president’s pecuniary interests – into duties and prerogatives allotted solely to the elected president and his treasurer of the national government.
Special Purpose Vehicles
A potential outcome which might be hoped for from these new SPV approaches for financing the private economy would be absorption of the Fed’s monetary functions into the Treasury, specifically including the issuance of currency on behalf of the government. This would accomplish a long-term, overriding goal: eliminating private pecuniary interests (i.e., private ownership of the Fed) which have dominated U. S. monetary operations and policies since the surreptitious creation of the Federal Reserve by Congress and President Woodrow Wilson during the Christmas season of 1913.
What is giving impetus to this extraordinary turn of events? To date, we have seen no mention officially of an intention either to end the Fed or to return to issuance of currency with value based on a gold standard. What we do see are organizational and operational innovations which improve efficiencies in financing of production and distribution of goods and services, so these crucial needs boost rather than slow economic growth. Certainly this fits the Trump economic agenda and methodology, and so is likely the product of his inventive pressures.
Modern Monetary Theory
Keynesian economists have dominated public policy towards the Fed the past 75 years, providing polemical cover and obscuring hidden motives for Fed actions with full support by major media. So why are the Keynesians going along with this SPV plan? The Fed’s owners must have green-lighted the SPV plan, and their reasons for doing so may be found partly in what is called Modern Monetary Theory (MMT).
MMT is a complex description of the manner in which government authority can be used to enervate a system of incentives and social needs which attribute value to official currency. In simplest terms, government edicts create currency, require the currency to be accepted as legal tender for all debts, and create demand for the currency by levying taxes payable only in the favored currency.
From that point, MMT proceeds to define manner and means by which management of the currency can achieve government objectives. What MMT fails to do, however, is provide a mechanism by which actual value is exchanged and placed in possession of the person or party who delivers goods or services. In other words, MMT does not offer or achieve the gold standard of money. The private person is left dependent upon the trustworthiness of a central government in holding and disposing of that actual value. Trust of this nature, whether freely given or mandated, has not proven to be well placed in any instance historically recorded.
Our Present Opportunity
May MMT be a useful tool to move from a private central bank (the Fed) to a government owned and managed monetary system? Theoretically, yes, but such a mid-way system which does not serve the families and power centers of the globalist cabal would find itself at war – cold, hot or both – with those financial powers. Therefore, the principal players in the globalist cabal must first be dealt with, defeated and stripped of their ill-gotten wealth. Otherwise, ending the Fed unilaterally would guarantee a deadly attack by the cabal at a time and place of their choosing (think COVID19). World history confirms this, whenever the truth is learned. Perhaps both of these events are occurring during the current American national emergency.
This leaves us presently in the same process described here on multiple earlier occasions. The news/opinion that President Trump is “your new Fed chairman” should be understood as a potentially significant step – even a leap – towards the goal of restoring an international gold standard monetary system to serve all people of the world. That is a goal worth supporting as events move forward month to month, even while crises intervene time and again to distract and delay the mission.