{"id":139425,"date":"2010-01-05T05:56:00","date_gmt":"2010-01-05T10:56:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/heres-how-to-debauch-the-currency-and-destroy-capitalism-2010-1"},"modified":"2010-01-05T05:56:00","modified_gmt":"2010-01-05T10:56:00","slug":"heres-how-to-debauch-the-currency-and-destroy-capitalism","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/139425","title":{"rendered":"Here’s How To Debauch The Currency And Destroy Capitalism"},"content":{"rendered":"

“The best way to destroy the capitalist system is to debauch the currency.” <\/span><\/em><\/p>\n

Vladimir Lenin, leader of the 1917 Russian Revolution <\/em><\/em><\/p>\n

Last week, while Congress and the nation were preoccupied with the holidays, the Treasury made a Christmas eve announcement that it would be providing Fannie Mae and Freddie Mac unlimited financial support for the next three years. The Treasury’s press release <\/a> notes:<\/p>\n

“At the time the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship in September 2008, Treasury established Preferred Stock Purchase Agreements (PSPAs) to ensure that each firm maintained a positive net worth. Treasury is now amending the PSPAs to allow the cap on Treasury’s funding commitment under these agreements to increase as necessary to accommodate any cumulative reduction in net worth over the next three years.”<\/p>\n

Put simply, in a single, coordinated stroke, the Treasury and the Federal Reserve have encroached on spending powers that are enumerated for the Congress alone. Under the Housing and Economic Recovery Act of 2008 (HERA), the Treasury has no such open-ended authority. Indeed, the applicable portion of the Act explicitly limits the total amount of mortgage principal <\/em>(not losses, but total principal) as follows:<\/p>\n

“LIMITATION ON AGGREGATE INSURANCE AUTHORITY.—The aggregate original principal obligation of all mortgages insured under this section may not exceed $300,000,000,000.”<\/p>\n

Read the whole post at Hussman Funds — ><\/strong><\/a><\/h3>\n

Join the conversation about this story »<\/a><\/p>\n

See Also:<\/b><\/p>\n