Treasury debt is the only taxable market for the Fed

Dudley: The Fed’s Done All It Can Do, Recovery Depends On Stimulus

Deficits are forced to pass through the Fed tax collection regime. The other debt markets can hide in the Shadow banking regime. But with equally offsetting tax collection in seigniorage, the effect of stimulus is likely net zero. The can will not kick, what Dudley really wants, as with Powell, is a new deal that puts inflation tax in the hands of Treasury where the Law assigned it. 

At this point most of the Fed members are in full blown Nixon Shock Revival, the Wile E Coyote moment.  They do not have the Overton window to speak clearly in this moment of hysteria. But, trust my decoder ring, these Fed members need another version of Nixon Shock but cannot say it.

If you follow our favorite banking  theorists we find they too are at a pause. They cannot connect dots without upsetting the mental state of the Fed board. It is not that the theory is incorrect, it is that their theory requires a consolidated step the crosses the Nixon Shock barrier. No one wants to be the heel for these mentally distressed bankers.

Our only hope for a non volatile generational overlap rests with small state governors, seriously, we may be doomed. I am looking to the governor of Wyoming because he seems to understand that sandbox technology is not waiting. 

GORDON: WYOMING APPROVES WORLD’S FIRST CRYPTOCURRENCY BANK CHARTER

So we have Mark Gordon of Wyoming and the governor of Arkansas both of whom seem to have brains and likely understand the issue. We need to push these to toward the meeting of the elders.