Like most people “of a certain age”, when I was young, I was taught that part of what made America special was that we were the most generous nation on earth. To prove the case, my elders would point out example after example of how American citizens and government continually helped out those around the world when they were in need. After Parumphistan was hit by a severe earthquake, for example, it was the Americans who rushed in to stabilize them with the most massive imports of food, blankets and funds to help them rebuild their schools and roads. When the people of Turkapopolis rose up and threw out an evil dictator, America was first on the scene to offer huge amounts of foreign aid and support for the fledgling new democratic government. And whenever the Papaneese people suffered from another devastating plague, it was American doctors and nurses who beat a trail to swoop in with life-saving vaccines and soothing lollipops for the children.
What my elders taught me was that American charity made a huge positive difference in the world. The emphasis they placed upon engaging in private charitable behavior helped inspire widespread pride in our nation and its ideals. For many decades, America was the leader in spending its disposable income to help everybody else in the world during their times of need. But slowly, as our country turned from a mostly agrarian frontier nation into a wealthy, urban, technologically advanced world power, our cultural motto of “Charity begins at home” turned into the increasingly militant belief that “We are are our brother’s keepers”.
Has that had any effects on us?
I believe it has – and not for the better. While the ideal of charitable giving has remained strong in the national psyche, our government has taken the concept to bizarre and hideous levels that have been helping to eviscerate the middle class for at least the past two decades. This year, in particular, our government appears to have taken the concept of charitable giving to fantastic new heights and twisted places under the guise of helping those laid low by the coronavirus debacle.
Remember the CARES Act? The sweeping legislation that was supposed to generously return to the people a share of the taxes levied on the workers, in order to help individuals and businesses devistated by the pandemic lockdown and layoffs? Did you get your share of the promised redistribution? Well, many people and businesses never found the government’s promised largesse in their bank accounts, and nobody seems to know why. But a few clues have recently surfaced. Taken together, they suggest that the help that millions of Americans were supposed to have received, was re-routed by the most powerful offices in the land to lend a hand to a struggling Wall Street, instead. And maybe even to financially stressed foreign governments.
Say what??!?
Using an Obscure Old Law As A Smokescreen For Modern Rip-Offs
The government has been ripping off and slowly impoverishing the American people for decades by funneling our hard-earned tax dollars to Wall Street, failing mutual funds, foreign governments and possibly other places via a poorly known financial law called the Exchange Stabilization Fund, or ESF. The ESF was enacted in 1934 for reasonable purpose: to help stabilize the U.S. currency during times of deep financial turmoil. However, the way in which it was set up offered rather fertile grounds for later mischief. Created and financed by the Gold Reserve Act of 1934 (1), the ESF is a rather opaque Federal entity that allows the sitting Treasury Secretary to use Treasury funds (i.e., taxpayer dollars), to intervene in any types of markets (currency markets, commodities markets, precious metals markets) anywhere in the world, including in the U.S., as necessary to maintain the stability and value of the US dollar. The ESF has also been used for such purposes as making loans to foreign governments to prevent their collapse, and insure the mutual funds market after a major bank collapse (ibid.) These intervention may take place without approval from, or even notice to, Congress, and can be undertaken at the sole and final discretion of the Treasury Secretary him- or herself.
Over the years, the ESF has grown to reach $34 billion in size. That may not sound like a lot given the monstrously bloated proportions of overall Federal spending, but remember, this money can – and currently is – being used without congressional oversight or the knowledge and consent of the people. It is also apparently not being utilized as charity at home, at least not for the average American citizen.
The ESF: A Way Of Robbing the Frail American Taxpaying Peter To Pay The World’s Foolish and Reckless Pauls?
The uses to which the Exchange Stabilization Fund have been put over the years are murky, but what is known certainly looks like example after example of serreptitiously redistributing ever greater amounts of American wealth via state-approved “charity” to failing governments and institutions around the world, including Wall Street. The most massively egregious abuse of taxpayer dollars via the ESF may have occurred this spring, during the throes of the COVID pandemic. (I say “may have” because, due to the paucity and fragmentary nature of the available evidence, it’s difficult to find a smoking gun. But the gun itself may be the lengths to which the government has gone to reduce the amount of evidence available.) Anyway, as if to kick failing American businesses and workers when they were down, President Trump issued a Memorandum on the Delegation of Functions under 31 U.S.C 5302 (https://www.whitehouse.gov/presidential-actions/memorandum-delegation-functions-31-u-s-c-5302/), in which he upped the ante of the ESF by authorizing a transfer of executive authority over the disposition of up to $500 billion of taxpayer money to the Secretary of the Treasury (who happens to be his personal friend, Steve Mnuchin). That money was supposedly intended to be distributed to aid struggling American businesses and workers under the CARES Act. It was also supposed to help the Fed absorb losses of capital under its emergency lending programs. Strangely, however, the bulk of the money, $360 billion of it, never left the Exchange Stabilization Fund. Even more strangely, Mr. Mnuchin apparently helped to make sure the potentially secretive ESF, over which he could exercise direct personal authority, was the account into which that money was deposited. A big question is why the money destined to help American workers and businesses, was deliberately deposited there, and put under Mr. Mnuchin’s sole authority? Also, why Mr. Mnuchin was given sole discretion as to the disposition of those funds, which were supposed to sit in (be used by) the ESF until January 1, 2026, and then returned to the Treasury’s General Fund to be put towards deficit reduction of they weren’t already spent?
Becoming Our Brothers’ Keeper, And Oppressor of His Family and Ours
Mr. Mnuchin is currently presiding over a pile of $368 billion taxpayer dollars over which nobody save Mr. Mnuchin himself, our current and past Presidents, the New York Fed, and the beneficiaries of the ESF funds, seem to know how it got there, or what was to be done with the CARES portion of it in place of directly helping struggling Americans. Also unknown is how it was to be used between now and 2026. Is it possible that some of the money has already been quietly pumped into the U.S. stock market to artificially reverse the massive decline it experienced during the height of the pandemic in mid-March? Could it be that the intended purpose of the CARES monies poured into the fund were to be used to continue to prop up the markets until Mr. Trump left office at the end of his presumed second tenure? The timing of the funds transfer and the subsequent puzzling upward march of the stock market in the face of steep overall economic decline, when combined with the tight security surrounding the sharing of information about U.S. interventions in markets, makes ruling out those possibilities impossible. In other words, it’s entirely conceivable that our Treasury Secretary, with our President’s approval, may be using our tax dollars today to charitably support the wealthy at the expense of everyday working Americans.
What some members of Congress and a few others DO know is that, in perverse acts of ‘generosity’, ESF funds have been used in the past without congressional approval to bail out both domestic mutual funds and foreign currencies and foreign investment failures and policy mistakes. In other words, to save both American and foreign governments and institutions from the consequences of their poor decisions or miscalculated greed. All at the expense of the U.S. taxpayer. While it looks like the ESF is more likely being used today to bail out the American stock market and asset holders, there’s no reason to dismiss the possibility that during a second term as President, Mr. Trump was also planning to indirectly preside over continued redistribution of our wealth to paper over foreign monetary and fiscal policy blunders – blunders which, oddly, often seem to have the puzzling consequence of making the most well off and politically connected in the affected countries, better off at the expense of the people.
Sadly, few sources in the mainstream or the financial press will cover the issue and inform us of what’s really going on with OUR money in the secretive Exchange Stabilization Fund. The one that I am aware of is Wall Street on Parade, written by a husband and wife team who do the investigative work of old-fashioned financial journalists. Their work helps expose that America IS being extremely generous – but to all the wrong people and institutions and for all the wrong reasons. For an eye-opening account of how YOUR dollars may be being used to serreptitiously lend a helping hand to everyone who is in trouble except yourself and your fellow working Americans, please take a close, careful read of the following article by Pam and Russ Martens (www.wallstreetonparade.com):
Trump Issued an Executive Memorandum Giving Mnuchin a $50 Billion Slush Fund; Mnuchin Gave Himself $386 Billion More
By Pam Martens and Russ Martens: December 1, 2020 ~
Five days before Congress passed the CARES Act on March 25 of this year, President Donald Trump issued an Executive Memorandum giving U.S. Treasury Secretary Steve Mnuchin complete discretion to use $50 billion in the Treasury’s Exchange Stabilization Fund (ESF) as Mnuchin solely saw fit. The Memorandum was dated Friday, March 20. On the prior Tuesday and Wednesday of that same week, Mnuchin had already used $20 billion of the Exchange Stabilization Fund to bail out Wall Street. As Mnuchin’s letter of November 19 to Fed Chair Jerome Powell confirms, he gave (or committed) $10 billion from the ESF to the Fed’s Commercial Paper Funding Facility on March 17 and another $10 billion to another Fed emergency lending program, the Money Market Mutual Fund Liquidity Facility, on March 18.
Most Americans have never heard of the Treasury’s Exchange Stabilization Fund (ESF), a slush fund available to the sitting U.S. Treasury Secretary since 1934. The ESF has grown from $94.3 billion in assets prior to Trump taking office to $682 billion as of September 30, 2020. As recently as March 31, 2007, the ESF had assets of just $45.9 billion, meaning it has grown by a factor of more than 14 times in 13 years.
The size of the ESF slush fund matters because under current law (31 U.S.C. §5302) the decisions on how to spend the billions in this slush fund belong to the Treasury Secretary and “are final and may not be reviewed by another officer or employee of the Government.” The law also provides that the Treasury Secretary “with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities the Secretary considers necessary.” Since publicly traded stocks are “securities,” that certainly sounds like the Treasury Secretary would have the right to intervene in buying up stocks to shore up the stock market, ….
To view the rest of the article, please visit https://wallstreetonparade.com/2020/12/trump-issued-an-executive-memoran… .
And now for the $64 trillion question:
Was Donald Trump, with the help of Steve Mnuchin, planning the world’s greatest heist under the guise of COVID relief? Did the revelation of the strange facts surrounding the disappearing CARES funds, uncover a grand scheme in which Trump was orchestrating the use of your tax dollars to secretively prop up the stock market in a grand, bigger-than-life, eight year long “pump and dump” swindle? A rip-off in which he would pave the way for the Dow to reach 50,000 or more and then allow himself, his family and his crony insiders to take their profits just before he left office, while leaving the public to hold the global bankruptcy bag? Given that Trump constantly proclaims himself to be the “king of this” and “world’s greatest” that, and rarely stops bragging about his prowess at “making deals”, it ‘s almost a no-brainer to believe that he could possibly have been planning history’s greatest robbery – with us as his hapless victims. At least it’s a plausible theory. And if it’s not true, now would be the time for him to come forth and set the record straight. I would actually prefer if he could provide a verifiable alternative explanation for why he gave the Secretary of the Treasury total control over $50 billion in tax money appropriated from the people, without expecting a full accounting for how that money would be redistributed back to the needy, as promised.
But I won’t hold my breath.
Maybe my theory is correct, and maybe it’s not, but the evidence so far certainly looks rather damning. If Joe Biden does make it into the White House in January, we may never know for sure. (BTW, I’m not a Democrat or a Biden fan, either.) But with Mr. Mnuchin recently making an odd public show of demanding back CARES money from the Fed that we now know never left the Treasury, the theory at least makes sense. The whole sordid scenario reminds me of a domineering, petulant child (Donald Trump) being pushed out of the play group and ordering his underling to pick up all the marbles so he can take them home and deprive the other kids of the opportunity to play. Is this what’s really happening? Only time will tell. But if the reality is ever fully uncovered and this turns out to be the truth, remember that you read it here first.
https://www.investopedia.com/terms/e/exchangestabilizationfund.asp
Economics Watchdog 
