The Senate should approve the New Fed today

If so, then tomorrow, what happens?

Two important things, that 1.5 T in government debt the Fed currently holds sets sterilized, it is now needed as  source of default debt, and is priced against the generic currency account the Fed opens, at zero. That account has a 2.5% upward default force, it cannot stay at zero. That account will be the default trend minus any net endogenous gains in banking productivity. S/L accounts can bet their productivity, and agencies will pay entry fees for accounts..

Second the Fed is eager to sign up the large government accounts and begins to act like a normal S/L retail banker, it competes under the representative sample clause. The large government accounts are looking at the New Fed currency account, they know it must move up. They want a Fed account to hedge the defaults.

Everyone wonders when the defaults happen, so Powell defaults on 25 billion for the collective test, and who knows?

From then on it is fun, and all the gains depend on he New Fed acting like an old fashioned S/L banker with currency powers under a non-profit mandate. The New Fed can create and destroy currency within a contacted variance. But, the New Fed will contend with the default process, like any other account, it has no real pre-knowledge.  When the observed trend deviates from default rate, the machine burns bonds. Everyone watches, but queues optimally price congested already.


Fair, fun, a learning experience, and productivity improving. We will get a Moore's Law jump, two or three generations of it all down the banking system. Better counting once we unbundle the government programs. The time has come today, young hearts may go their way. It really doesn't matter anyway. The Fed and member accounts are eft with the human job, making deals, signing contract, moving money; all with a much better hologram.