TPS

I certainly understand the credit system and the ability to use "other forms of currency," but those do have limits. Currently, the main "currency" used to support is credit creation is whatever is accepted as collateral, and US treasuries are the collateral of choice, so in a way the financial system does depend on the actions of the Treasury and Fed. More important, the US$ is NOT "just a form of currency," it is the unit of account that is designated "legal tender," and--what you seem to have difficulty grasping--the US government owns the monopoly on its creation (note, we're not simply talking about physical dollar bills). While Apple can purchase Tesla by issuing new stock, it does not pay its suppliers with stock, it is not buying Intel's chip business with its stock, it does not pay interest on its bond in stock, nor can it pay its taxes with its own scrip. While there are many financial transaction that use different financial instruments, they have limitations. In the end, there is only one financial instrument that is designated as "legal tender for ALL debts public AND PRIVATE." In the next financial crunch, when financial entities are scrambling to "get liquid," they are not going to buy crypto or apple stock, they will buy US treasuries because they are guaranteed to be converted into the designated means of payment. Note, there will also be a dramatic scramble for the government's "currency" (I mean treasuries here) used as collateral, especially if it's been re-hypothecated.... Getting back to the main point, which is: as the monopoly issuer of the US$, the federal government does not face a financing constraint This is where you seem to have trouble grasping the difference between the US government and any other entity. It is the settlement "mechanics" between the treasury, Fed, and primary dealers that guarantees the US government does not face a financing constraint--it can spend ANY AMOUNT of money that congress appropriates. If congress says here's another $200 billion to fund war against Iran, then it will be spent, and it doesn't matter what the financial sector thinks. Central bank reserves as a minor reason for stabilizing the system? Hmmmm.... How do you think reserves get created? When everyone panics and wants to get liquid, where do you think that "money" came from? When the FED supports any market in times of crisis, how do you think it does that? Reserves are the "ultimate currency" of the banking system and the FED controls their creation. The FED's actions to stabilize the system are what created the $3 trillion in additional bank reserves. First, your favorite Wall Street banks were given a lifeline (use of the discount window) when they were required (by the FED) to become bank holding companies. This gave JPM and Goldman the ability to borrow reserves directly from the FED. However, the majority of reserves were created in the traditional way--open market operations, though they expanded the types of assets they "bought" dramatically, no longer just treasuries. When the FED bought commercial paper and MBS, they "pay" for those assets by crediting the reserve account of the "bank" they bought it from. Reserves are what backstops the drain of funds from financial institutions. As funds are drained from an entity, they can either sell assets or borrow funds to replenish their accounts. In the crisis, the only entity lending was the FED. The current $1.4 trillion of excess reserves in the banking system is the legacy of the FED's unprecedented intervention in the markets--plural! This is the issue--the US government is different, and it is NOT because the US$ is the reserve currency. NO! Again, THE MAIN ISSUE: the US government does NOT have a financing constraint (it does not have to borrow that which it creates). There are two politically imposed legal constraints that makes it difficult for people to see this: 1) the US government is required to sell bonds equal to its deficit; and 2) the FED CAN'T directly fund the treasury. The mechanics are important to understand this, and the mechanics require the use of private sector banks, the primary dealers. PDs are required to make the market for treasury auctions, and they (almost) always buy treasuries using their excess reserves (which are simply values on a computer at the NYFed). For example, when JPM's bids are accepted, their securities increase and their reserves are decreased by the value of their purchase (2 actions on the asset side of its BS); on the Fed's BS, JPM's reserve position is reduced and the treasury's account is increased (2 actions on the liability side of the FED's BS). Here is the key: What if JPM does not have the excess reserves to purchase the treasuries they are required to bid on? The Fed will buy some of JPM's existing treasuries (again, the Fed can't directly fund the treasury) and the Fed "buys" them by crediting JPM's reserve account (on the Fed's computer). Voila! JPM now has the excess reserves to "buy" the new treasuries at auction (and the treasury's account at the Fed is increased in the same way as above). In this case, the FED has indirectly funded the treasury. After these actions JPM's BS is unchanged; and on the Fed's BS, its treasuries are increased (asset side) and the Treasury's account (liability side) is increased by same. The political constraints complicate the process, but the end result is the FED "funds" the Treasury. Since the FED has unlimited "funding capacity" (because it owns the computer and accounts that credit and debt reserves and the Treasury's checking account), the Treasury effectively has an unlimited capacity to spend US$s--it is only limited by the amount congress appropriates. Despite the flexibility of finance to use other means to purchase assets and create credit (and I completely agree with you here), they ARE financially constrained--they can't create reserves and US$ in which the majority of payments are required. Note, since the treasury auctions are always filled because the PDs are required to bid, it does not matter that the US$ is the global reserve currency. Again, the republicans seem to understand there is no financing constraint--they have no problem cutting taxes (for the rich...) and increasing defense spending causing larger deficits. They ONLY seem to care about debt and deficits when the Dems are in the WH and want to increase spending on social programs. While there is NO limit to the federal government's ability to spend (any amount of money congress appropriates), it IS constrained by available resources--in the US, we typically run out of labor before we run out of physical capital. For example, during WWII, the unemployment rate hit 1.2%. This happened because government used deficit spending. In 1943 the deficit was 30% of GDP! However, the government reached the limits of its ability to spend--If you try to increase deficit spending when you run out of labor and capital, the result will be inflation. This is why I think it's interesting that Trump expanded the deficit at a point when many economists thought the US was at full employment. The bigger deficits juiced the economy and pushed unemployment below 4%. Since we still don't see much inflation, it suggests there is still "fiscal space" available to push the economy faster and unemployment lower. The end comes when the FED decides to take away the punch bowl, which is why Trump is haranguing Powell about raising interest rates. The end.

Maybe someday you'll understand the difference between an entity that issues the currency we use and one that does not... you and I can't issue US$s (nor can corporations, states and local governments), so we have to borrow in order to spend in excess of our current resources. The US government, as the monopoly issuer of US$, can spend whatever amount congress appropriates. (The republicans understand this which is why they tend to cut taxes AND increase spending when they.re in the WH.) By law, The treasury has to sell bonds to "fund" spending in excess of revenues (deficit spending), AND the Fed can't DIRECTLY fund the Treasury. The FED, and its system of primary dealers, Ensures that there is NEVER a funding constraint for the US government because it can NEVER run out of a currency it controls. When the US government spends, the Fed credits the deposit of Raytheon AND the reserve account of Raytheon's bank. The bank (a primary dealer) now has the reserves that allows it to purchase bonds at the treasury's next auction, which it is required to do as a primary dealer (which is why treasury auctions always fill--the PDs are required by the Fed to bid). If the Banks have insufficient reserves to purchase new bonds, then the Fed will purchase existing bonds from the banks. In effect, the Fed INDIRECTLY funds the treasury because it can't directly fund it, by law. This is Not theory, this is how the system works. It means the US government NEVER faces a financing constraint. It means the US government will always be able spend any $ amount congress appropriates. It means that spending in excess of revenues (deficit spending) raises the demand (sales and profits) for Raytheon's missiles (and if they hire more workers in response, they spend more on consumer goods), which means deficit spending spurs the private sector to create more wealth. Because you don't understand what "deficit spending" means, you continue to believe the US government has to take from the private sector in order to spend, which makes you believe "government can't create wealth." While the US government doesn't create things, it does inject/create more dollars for the private sector when it spends which spurs the private sector to create more wealth (more Raytheon missiles and workers). Unfortunately, accepting how US deficit spending works also means the rejection of the conservative philosophy that US government can only spend what it takes from the private sector, and that's too difficult for some to come to grips with. However, the republicans have no problem with it in practice. let me point out, as I have in the past, while the US government has no financing constraint, its spending IS constrained by available real resources--labor and capital. If the government increases deficit spending as labor becomes scarce, it can cause inflation. This is why I've said Trump's policies are an interesting experiment for this correct view of government financing. He increased deficit spending when we are near what some considered full employment, pushing the unemployment rate to lows unseen since the 1960s. This suggests there is room for even more deficit spending stimulus. Final point. Only governments that issue debt in their own currency are not financially constrained. State and local governments are required to balance their budgets, so they are financially constrained; Greece issues debt in euros, so it is constrained; many developing economies issue international debt in hard currencies which makes them financially constrained; and most underdeveloped countries fall under the constraint that they lack capacity in real resources, so any attempt to deficit spend is inflationary--increasing spending when you can't produce more things. On a political board that's dominated by conservative ideology, I know most will believe this hogwash. I would hope at some point you would start to question why the US has not had a day of reckoning with its $22 trillion (and growing) debt? Why if deficits are rising under Trump the 10-year US T-bond rate has declined over the past year? Why didn't QE cause inflation to exceed the Fed's 2% target? And why is GG always wrong...? ?

They're not going to win the Thanksgiving game!?!?

It simply means that government spends more $s into the economy than it takes out in taxes.

It's disingenuous to talk about deficits in isolation from the other sectors of the economy, as there are 4 components of demand. Is it that hard to understand that injecting $1 trillion of demand into an economy when business and household spending is declining will have a different impact than when they are both expanding? That was the point of Keynes, when the private sector won't spend, and unemployment is high, the government should deficit spend and put people back to work. Guess what happens when those people spend money from their government jobs funded by deficit spending?

It's going to be a tough battle for the 6th spot...

Oh, I understand full well that you think Trump has unleashed a business boom because of the tax cuts and deregulation; whereas I see the economy being boosted by expanded deficits. I think the latter is more important than the former, in the current situation. I guess I'll counter with I'm astounded that you don't seem to grasp how the FED operates, which has nothing to do with a textbook...

When I say QE had no or little effect, I'm focused on the real economy--producing things (GDP). You're right, banks certainly took advantage of borrowing at 0%, but much of the lending went to asset speculation (including M&A). If it was so successful, then we would've seen stronger economic growth (maybe this is where you're going to bring your deficit argument???). The FED can't make households and businesses borrow to fund expenditures, and QE2 and 3 show this. You can provide all of the liquidity you want and keep interest rates at 0 for as long as you want, but it don't mean beans unless it stimulates spending by HHs and Firms. Finally, I do get the inter-bank markets. Given the level of excess reserves in the banking system now, the FED Funds market (where the FED sets its target) is not so relevant any more. The repo markets are where the action is now, and any other markets that require the use of treasuries as collateral........

Yes, the reason we NEVER really experienced inflation above the FED's target is that reserves simply represent "potential" lending power, not money in circulation. QE did stimulate speculation in other assets and commodities as I argued here back then...

Here's a nice short piece by some FED economists: https://www.clevelandfed.org/newsroom-and-events/publications/economic-trends/2015-economic-trends/et-20150811-who-is-holding-all-the-excess-reserves.aspx

It's not a theory; it's fact--Reserves of depository institutions increased from 2008 to 2014 during the crisis and QE policies. Not sure why chose to start at 2010 when the crisis was over by then...? Besides, only part of JPM's BS reflects its depository banking business. Ok, $s. I responded to Foxx who said the FED created about $3.5 trillion "out of thin air." Hopefully you understand how the FED does this....it "buys" an asset by "crediting bank reserves." If it buys an asset directly from a bank, bank assets fall by an amount equal to the increase in its "reserve account held at the FED;" if it buys from an individual, the person's DD is credited along with the bank's reserve position. Either way, bank reserves increased. Bank reserves on deposit with the FED went from near zero to a max of near $2.5 trillion in 2014. The following is a link to the FED with the data: https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm [just checked this, and you need to change it to "selected liabilities" of the FED]. The FED only requires reserves and holds reserves for deposit-taking institutions, so of course if you look at the consolidated BS of JPM it will be difficult to disentangle this effect--especially since you started in 2010, not pre-crisis. When the FED required the Wall Street banks to become BHCs, it gave them access to the Discount Window, which is what kept them alive in the meltdown. Back to main point. QE was enacted by the FED through buying assets via crediting reserves. The FED's balance sheet expanded from about $900K in 2007 to $4.5 trillion in 2014. The reflection of this expansion was the increase in bank reserves by $2.5 trillion. YES, this money is sitting under the FED's mattress so to speak, and (since 2009) the FED pays interest on the bank reserves they hold. This is why I argued with so many here that that QE was not going to cause hyperinflation because reserves do not circulate in the economy. This is the THEORY part. Many people, here included, thought QE would cause significant inflation; it didn't because the funds used to buy the assets are sitting under the FED's mattress.

Yes and No. As a share of total assets, "cash" went from <2% pre-crisis to to > 10% post. Securities and Loans fell by 10% of TA (mostly loans). So, yes, reserves increased, and No, the share of other assets fell.

Stashed under the Fed’s mattress, who started paying interest on excess reserves in 2009. With th the exception of vault cash, the majority of bank reserves were (and still are) “held on accounts with the Fed.”

@plenzmd1 the above might be the thread, then again we've done this topic to death in many places... QE doesn't necessarily create money, most of it created bank reserves which had no impact on the economy. Deficits never really mattered.....

If your point is the second half of preseason games is an indication of which team has better depth, I agree to an extent. Looking at the scores from last year, though, doesn’t seem to support your belief. There’s no clear trend.

I did a search of "Dutroux" but nothing came up. I was surprised that it hasn't been discussed here? This article was in one of my news feeds this morning, and there is so much more to it than the topic itself.... The Belgian case of Marc Dutroux This case is worse than Epstein's but has parallels. It makes me wonder if Epstein's case will end similarly--is the cabal so entrenched they will have the power to limit the damage? For those who doubt the possibility of vast conspiracies, asking how it is possible they can keep them suppressed, this is a good example. I hope to God that @Deranged Rhino is right about Trump being part of an attempt to expose this vile *****.

It can't happen until after I get a hole-in-one......

Cleveland via Pittsburgh where I attended a wedding over the weekend. A die hard Browns fan said "they got the best QB of the class." He also focused on the accuracy issue. I bet him a drink that Buffalo will win more games with the best QB of the class...

As you note, a lot of things point to improvement. Last year they were tied for 7th in INTs. With greater stability at CB2 and more experienced players, notably Taron J in the slot and Edmunds in the middle, there’s no reason they can’t be #1. It’s actually quite a feat that they did so well last year.

Jerry and Kyle were the only 2 DL with more than 60% snap counts last year. I think Jerry will be the only one this year to break 60. Since Oliver is a rookie, Jordan will get more than enough reps (40% range).

He's projecting 7 for Oliver which is a good over/under number. Thought I would add @Inigo Montoya's thread on this:

The Bills ranked 31st in their 4th down conversion rate in 2018. I think what this states is they were good at making the right decision on 4th and 5 or less yards. I think one of the reasons McD and Beane re-did the O-line is they did not win the line of scrimmage on most short yardage runs, with the exception of Allen and his sneaks. I expect them to be much better with some of the beasts they brought in.... https://www.teamrankings.com/nfl/stat/fourth-down-conversion-pct

Any type of 2020 free agent is not counted in the projected 2020 cap, and those two will both be UFAs. Btw, @ShadyBillsFan the Knox contract is up on Spotrac now.

This will be the main question for the Bills' D this year--can they improve the run D? As I mentioned in the thread, I think Jordan Phillips can be a big part of improving the run D as he provides a much bigger body next to Star. Then there's Edmunds with a year of experience to help as well. We'll find out early in the season as they will face some of the top RBs in the league in the first several weeks. The pass D should be even better for the reasons you mention.

The sky's the limit for this defense...