Fed Chair Powell: 'The law is clear,' Trump can't fire me

[enhanced_deficit]

Fed Chair Powell: 'The law is clear,' Trump can't fire me

• Fed Chairman Jerome Powell told "60 Minutes" in an interview aired Sunday that President Donald Trump cannot remove him from office.
• The president has said the Fed's interest rate hikes are the biggest threat to economic growth.

Jeff Cox Published 1 Hour Ago Updated 1 Hour Ago CNBC.com

Federal Reserve Chairman Jerome Powell said in an interview aired Sunday that he does not think he can be fired by President Donald Trump.

While continuing to avoid direct comment on the president's withering criticism of central bank interest rate policy, Powell told "60 Minutes" that Trump can't remove him from office.

"The law is clear that I have a four-year term, and I fully intend to serve it," Powell told the CBS news magazine show. Asked directly if he thought Trump could fire him, he said, "no."

https://www.cnbc.com/2019/03/11/fed-...t-fire-me.html

[DamianTV]

Then the LAW is WRONG.

Just because it is "legal" does NOT mean it is "moral", which is my definition of "wrong". As far as I am concerned, if Trump tries to fire the entire $#@!ing Fed, then he will be respected. It was on Ron Pauls list of things to do, and one of the ONLY reasons I started listening to Ron Paul to begin with.

[devil21]

Hmm....Trump could order the Fed nationalized under the Treasury, however. Then, Powell would be serving at the pleasure of the President and could be fired.


That's paper entity perception games, of course, but it could be done. Plenty of precedent and EO's of .gov granting itself nationalization powers.

[oyarde]

By law huh ? Well by law ( 1935 banking act ) all appointments to the Fed board of Governors as well as the Chair must be a " fair representation of the financial,agricultural , industrial and commercial interests and geographical divisions of the country " . I can easily see myself as president determining this is not the case and dismissing them all and locking them out at close of business and sending out an e mail memo to each of them as notification . That is how you wield " law " . He could dismiss the entire board as an easy case can be made they do not meet the criteria to serve . In a week or so nobody would care .

[Brian4Liberty]

He could end the Fed. Powell would still be looking for a new job.

Unfortunately, I doubt Trump has the slightest interest in sound money or ending the debt and deficit gravy train.

On the other side of the aisle, if you turn that power over to AOC and Bernie, that train will be pushed into overdrive. Print money, free money!

[Zippyjuan]

He could end the Fed. Powell would still be looking for a new job.

Unfortunately, I doubt Trump has the slightest interest in sound money or ending the debt and deficit gravy train.

On the other side of the aisle, if you turn that power over to AOC and Bernie, that train will be pushed into overdrive. Print money, free money!

Trump wants to keep the stock market pumped up. He wants loose money.

https://www.forbes.com/sites/patrick.../#769f5d2b586c

The Chairman can only be fired for "just cause".

“…thereafter each member shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President.”

Fed monetary policy is not set by the Chairman but by all the members. They get together, debate, and then vote on what they will do. Firing Powell for cause would not necessarily change anything.

[Krugminator2]

Here's an unpopular take for a Ron Paul supporter. I think the Fed since Volcker has done a pretty good job. And I think Ben Bernanke did a remarkably good job handling the financial crisis.

I get the criticism of the Fed from Ron because of the time he started forming his political views. The 1970's especially were a dumpster fire. The Great Depression was entirely the fault of the Federal Reserve. Mises and Hayek grew up with hyperinflation in Austria and saw it in Germany. But inflation over the last 4 decades has been pretty low for a fiat currency in the US. Volcker put Milton Friedman's ideas of targeting money supply to end out of control inflation. You had an Ayn Rand gold standard guy in Alan Greenspan. Ben Bernanke was a Milton Friedman guy. And the conventional view at the Fed has largely been influenced by Volcker, Greenspan, and Bernanke. Yellin is a little more to the left. Powell isn't terrible.

What I am saying is things could be A LOT worse in terms of monetary policy. If the MMT people or the Keynesians of the old school socialist variety were in charge inflation could actually be a problem again. It is worth having a little perspective. Things could be better. They could also be a whole lot worse.

[loveshiscountry]

Here's an unpopular take for a Ron Paul supporter. I think the Fed since Volcker has done a pretty good job. And I think Ben Bernanke did a remarkably good job handling the financial crisis.

I get the criticism of the Fed from Ron because of the time he started forming his political views. The 1970's especially were a dumpster fire. The Great Depression was entirely the fault of the Federal Reserve. Mises and Hayek grew up with hyperinflation in Austria and saw it in Germany. But inflation over the last 4 decades has been pretty low for a fiat currency in the US. Volcker put Milton Friedman's ideas of targeting money supply to end out of control inflation. You had an Ayn Rand gold standard guy in Alan Greenspan. Ben Bernanke was a Milton Friedman guy. And the conventional view at the Fed has largely been influenced by Volcker, Greenspan, and Bernanke. Yellin is a little more to the left. Powell isn't terrible.

What I am saying is things could be A LOT worse in terms of monetary policy. If the MMT people or the Keynesians of the old school socialist variety were in charge inflation could actually be a problem again. It is worth having a little perspective. Things could be better. They could also be a whole lot worse.

Bailing out banks to the tune of 16 trillion didn't work. That includes foreign banks that somehow qualified for Americans money. Ten years since the crash and welfare is still sky high and that's a decent job?
Yellin admitted to not seeing the crash coming. Maybe she isn't dumb. Maybe she knows no matter what she says, she'll still get hand picked.

[timosman]

Bailing out banks to the tune of 16 trillion didn't work. That includes foreign banks that somehow qualified for Americans money. Ten years since the crash and welfare is still sky high and that's a decent job?
Yellin admitted to not seeing the crash coming. Maybe she isn't dumb. Maybe she knows no matter what she says, she'll still get hand picked.

You must have never tried doing the God's work.

[Zippyjuan]

Bailing out banks to the tune of 16 trillion didn't work. That includes foreign banks that somehow qualified for Americans money. Ten years since the crash and welfare is still sky high and that's a decent job?
Yellin admitted to not seeing the crash coming. Maybe she isn't dumb. Maybe she knows no matter what she says, she'll still get hand picked.

There was no $16 trillion bailout. That number was achieved by massive over-counting. Loans to banks were overnight loans. If they kept the money another day, it was counted as a new loan even if the amount did not change. If a bank borrowed $100 million and kept it for 30 days, it was counted as $3 billion in loans- not the actual $100 million amount. Total outstanding loans to banks from the Fed peaked at $653 billion in December of 2008. Not $16 trillion. https://fred.stlouisfed.org/series/BORROW

Foreign banks were not eligible for loans though US branches owned by foreign banks could borrow for that location.

[loveshiscountry]

There was no $16 trillion bailout. That number was achieved by massive over-counting. Loans to banks were overnight loans. If they kept the money another day, it was counted as a new loan even if the amount did not change. If a bank borrowed $100 million and kept it for 30 days, it was counted as $3 billion in loans- not the actual $100 million amount. Total outstanding loans to banks from the Fed peaked at $653 billion in December of 2008. Not $16 trillion. https://fred.stlouisfed.org/series/BORROW

Foreign banks were not eligible for loans though US branches owned by foreign banks could borrow for that location.

"Page 131 – The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.

Pages 133 & 137 – Some of these “broad-based emergency program” loans were long-term, and some were short-term. But the “term-adjusted borrowing” was equivalent to a total of $1,139,000,000,000 more than one year. That’s more than $1 trillion out the door. Lending for these programs in fact peaked at more than $1 trillion.

Pages 135 & 196 – Sixty percent of the $738 billion “Commercial Paper Funding Facility” went to the subsidiaries of foreign banks. 36% of the $71 billion Term Asset-Backed Securities Loan Facility also went to subsidiaries of foreign banks.

Page 205 – Separate and apart from these “broad-based emergency program” loans were another $10,057,000,000,000 in “currency swaps.” In the “currency swaps,” the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion."

[Zippyjuan]

"Page 131 – The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.

Pages 133 & 137 – Some of these “broad-based emergency program” loans were long-term, and some were short-term. But the “term-adjusted borrowing” was equivalent to a total of $1,139,000,000,000 more than one year. That’s more than $1 trillion out the door. Lending for these programs in fact peaked at more than $1 trillion.

Pages 135 & 196 – Sixty percent of the $738 billion “Commercial Paper Funding Facility” went to the subsidiaries of foreign banks. 36% of the $71 billion Term Asset-Backed Securities Loan Facility also went to subsidiaries of foreign banks.

Page 205 – Separate and apart from these “broad-based emergency program” loans were another $10,057,000,000,000 in “currency swaps.” In the “currency swaps,” the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion."

Try page #130. https://www.gao.gov/new.items/d11696.pdf

Table 8 aggregates total dollar transaction amounts by adding the total dollar amount of all loans but does not adjust these amounts to reflect differences across programs in the term over which loans were outstanding. For example, an overnight PDCF loan of $10 billion that was renewed daily at the same level for 30 business days would result in an aggregate amount borrowed of $300 billion although the institution, in effect, borrowed only $10 billion over 30 days.

Table Eight shows $16 trillion because it uses that unadjusted counting method. Chart on page 132 which does not count a $10 billion loan over 30 days as a $300 billion loan but rather as a $10 billion one (the actual amount) shows that total loans were really $1.1 trillion- not $16 trillion.

Any participants had to put up collateral for any loans.

[acptulsa]

You must have never tried doing the God's work.

Who are you talking to?

Zippy is clearly shilling for the Fed, as usual, and Krug is putting up a halfhearted defense, and you lay that tripe on the guy who popped up in between to criticize the bailout?

[timosman]

Who are you talking to?

Zippy is clearly shilling for the Fed, as usual, and Krug is putting up a halfhearted defense, and you lay that tripe on the guy who popped up in between to criticize the bailout?

At this point I just hope "the guy who popped up in between" has a better sense of humor than you. Comparing the bailout to God's work is clearly an endorsement on my part.

[acptulsa]

At this point I just hope "the guy who popped up in between" has a better sense of humor than you. Comparing the bailout to God's work is clearly an endorsement on my part.

Well, comparing someone to Lloyd Blankfein stroking his own ego is not so clearly a compliment to me, no. But, great! Glad to hear it!

[Krugminator2]

Who are you talking to?

Zippy is clearly shilling for the Fed, as usual, and Krug is putting up a halfhearted defense, and you lay that tripe on the guy who popped up in between to criticize the bailout?

To be clear, I am for eliminating the Federal Reserve. I just have a much more nuanced take on it. I think it has done a really bad job for most its existence and done a lot more harm than good. But in more recent times, I don't think it has been the creator all evils that some portray it. The biggest problem I see now with the Fed is it gives way to much power to one institution. And if you have someone like AOC who appoints the Fed chair, I think you could have major problems. But I do think Ben Bernanke was the exact right person to have in charge to deal with the financial crisis.

[acptulsa]

To be clear, I am for eliminating the Federal Reserve. I just have a much more nuanced take on it. I think it has done a really bad job for most its existence and done a lot more harm than good.

I remember the 1970s too.

[Zippyjuan]

I remember the 1970s too.

A good argument for keeping money control away from Congress or the President.

[acptulsa]

A good argument for keeping money control away from Congress or the President.

As in, don't let Nixon take us completely off the last remnants of the gold standard at Bretton Woods?

If that's what you meant, I agree with you for once.

[Zippyjuan]

As in, don't let Nixon take us completely off the last remnants of the gold standard at Bretton Woods?

If that's what you meant, I agree with you for once.

The Fed was much more accommodating to what politicians wanted- easier money. Like Trump wants too. It resulted in the high inflation and stagnant economy of the 70's. They finally tightened things up in 1980.

We have had inflation and recessions with and without a gold standard. With our rising trade deficit, if Nixon hadn't closed the "gold window" the US might have run out of gold even if we wanted to still back our currency with it.

[acptulsa]

We have had inflation and recessions with and without a gold standard.

The recessions were much more brief and the inflationary periods alternated with deflationary periods when we used gold as our money. That was when the middle class was expanding, not disappearing.

[Zippyjuan]

The recessions were much more brief and the inflationary periods alternated with deflationary periods when we used gold as our money. That was when the middle class was expanding, not disappearing.

We were pretty much without a middle class until after WWII- and we were on a gold standard. Great Depression happened on a gold standard.

And recessions have actually been shorter. https://en.wikipedia.org/wiki/List_o..._United_States

[acptulsa]

We were pretty much without a middle class until after WWII- and we were on a gold standard. Great Depression happened on a gold standard.

And recessions have actually been shorter. https://en.wikipedia.org/wiki/List_o..._United_States

"Pretty much without a middle class" is an opinion you pulled out of your ass. The U.S. always had a middle class. It grew until 1971. Then the dollar devaluation began in earnest, and it has been disappearing ever since.

[loveshiscountry]

Try page #130. https://www.gao.gov/new.items/d11696.pdf
Table 8 aggregates total dollar transaction amounts by adding the total dollar amount of all loans but does not adjust these amounts to reflect differences across programs in the term over which loans were outstanding. For example, an overnight PDCF loan of $10 billion that was renewed daily at the same level for 30 business days would result in an aggregate amount borrowed of $300 billion although the institution, in effect, borrowed only $10 billion over 30 days.

And? So?

Table Eight shows $16 trillion because it uses that unadjusted counting method. Chart on page 132 which does not count a $10 billion loan over 30 days as a $300 billion loan but rather as a $10 billion one (the actual amount) shows that total loans were really $1.1 trillion- not $16 trillion.

Any participants had to put up collateral for any loans.

lol How does that change anything and why are you insisting foreign banks didn't get bailed out?

[Zippyjuan]

And? So?


lol How does that change anything and why are you insisting foreign banks didn't get bailed out?

US branches of foreign banks were allowed to borrow money.

https://www.thestreet.com/story/1093...s-bailout.html

The program was open to all banks with access to the Fed's primary discount window and allowed foreign banks access through local reserve banks where branches were located.

A branch could not borrow more than their assets or the amount of collateral they could put up. If they had $10 million in deposits, they could not borrow $100 million and give some to other banks. A branch in Zurich or Paris could not borrow funds. A branch in Chicago could.

[loveshiscountry]

US branches of foreign banks were allowed to borrow money.

https://www.thestreet.com/story/1093...s-bailout.html
The program was open to all banks with access to the Fed's primary discount window and allowed foreign banks access through local reserve banks where branches were located.


A branch could not borrow more than their assets or the amount of collateral they could put up. If they had $10 million in deposits, they could not borrow $100 million and give some to other banks. A branch in Zurich or Paris could not borrow funds. A branch in Chicago could.

What does this have to do with anything I posted except to prove what I said in that foreign banks got bailed out?

Page 129 - In October 2008, the Fed gave $60,000,000,000 to the Swiss National Bank with the specific understanding that the money would be used to bail out UBS, a Swiss bank. Not an American bank. A Swiss bank.

[Zippyjuan]

What does this have to do with anything I posted except to prove what I said in that foreign banks got bailed out?

Is a bank in Chicago a foreign bank? Banks located outside the US were not bailed out by the Fed.

[loveshiscountry]

Is a bank in Chicago a foreign bank? Banks located outside the US were not bailed out by the Fed.

UBS was and yes a bank run in Chicago by the Russians is a foreign bank.

[Zippyjuan]

What does this have to do with anything I posted except to prove what I said in that foreign banks got bailed out?

Page 129 - In October 2008, the Fed gave $60,000,000,000 to the Swiss National Bank with the specific understanding that the money would be used to bail out UBS, a Swiss bank. Not an American bank. A Swiss bank.

That section is discussing a credit swap. In a credit swap, the Fed gives them say $100 million in dollars and they have to give the Fed $100 million in Swiss Francs so their banks can have more dollars on hand. If I give you $100 million and you give me $100 million have I actually given you anything?

In October 2008, according to Federal Reserve Board staff, the
Federal Reserve Board allowed the Swiss National Bank to use
dollars under its swap line agreement to provide special assistance to
UBS, a large Swiss banking organization. Specifically, on October 16,
2008, the Swiss National Bank announced that it would use dollars
obtained through its swap line with FRBNY to help fund an SPV it
would create to purchase up to $60 billion of illiquid assets from UBS.
According to FRBNY data, from December 11, 2008, through June
2009, Swiss National Bank drew dollar amounts generally not
exceeding about $13 billion to help fund this SPV that served a
function similar to that of the Maiden Lane SPVs. Federal Reserve
Board staff acknowledged that this was an atypical use of swap line
dollars as the swap line agreements were initially designed to help
foreign central banks provide dollar loans broadly to institutions facing
dollar funding strains. Although the FOMC had delegated approval
authority to FRBNY for each swap line draw by the Swiss National
Bank, Federal Reserve Board staff said that this proposed use by
Swiss National Bank was informally brought to the attention of the
FOMC Foreign Currency Subcommittee members for their
consideration before the Swiss National Bank’s announcement.
Federal Reserve Board staff said that Foreign Currency
Subcommittee members believed that this use was consistent with the
broader policy objective of stabilizing dollar funding markets and that
the Swiss National Bank was a very reliable counterparty. Federal
Reserve Board staff said that this consultation was not required by the
policies and procedures established for the swap lines program.
According to FRBNY staff, this use of swap line dollars was permitted
under FRBNY’s amended agreement with the Swiss National Bank.

[loveshiscountry]

That section is discussing a credit swap. In a credit swap, the Fed gives them say $100 million in dollars and they have to give the Fed $100 million in Swiss Francs so their banks can have more dollars on hand. If I give you $100 million and you give me $100 million have I actually given you anything?

lol Still doesn't have anything to do with what I posted.

The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion.