| All about central banks, economy gets a health check, and warnings against default. The Federal Reserve's contribution to a very busy couple of days for central banks around the world turned out to be in line with what markets were expecting. Also yesterday, Brazil's central bank hiked rates a full percentage point. Already today, we've had decisions from the central banks of Switzerland (hold), the Philippines (hold), and Norway (rates raised 25 basis points). Later this morning the Bank of England is expected to make no change to policy, while things could be much more interesting in Turkey where the governor has to make a decision between market pressures and the president's expectations. South Africa's monetary authority also announces its latest decision today. With yesterday's dot-plot taking a hawkish turn, investors will remain focused on signals about the health of the recovery. This morning's claims data is expected to show a drop in the number of people signing on for jobless benefits to 320,000, a number still well above the pre-pandemic average. Purchasing-manager survey data, also published this morning, may slow a slight decrease both in manufacturing and services. Data from Europe showed the recovery has lost some steam this month, with Germany, France and the U.K. all reporting slower-than-expected growth.  | What do Chinese regulators and Fed Chair Jerome Powell have in common? They both warned against defaulting in the past 24 hours. Authorities in Beijing instructed China Evergrande Group to avoid a near-term default on its dollar bonds. There is an $83.5 million coupon due for payment today. In the U.S., Powell said the Federal Reserve doesn't have the ability to protect financial markets or the U.S. economy from a failure to raise the debt ceiling. He said such a failure is something is "just not something we should contemplate." It seems there is little appetite in Washington yet to heed Powell's warning as both sides continue to engage in brinksmanship. The as-expected Fed decision and increasing signs that Evergrande's problems will not be systemic are helping lift global equities. Overnight the MSCI Asia Pacific excluding Japan Index added 1%, with markets in Tokyo closed for a holiday. In Europe the Stoxx 600 Index was also 1% higher at 5:50 a.m. Eastern Time, with every industry sector rising. S&P 500 futures pointed to a strong start to the session, the 10-year Treasury yield was at 1.341%, oil held above $72 a barrel and gold rose. The Bank of England and Turkish rate decisions are both at 7:00 a.m. Initial jobless claims numbers are at 8:30 a.m. with PMI data for September at 9:45 a.m. The August Leading Index is at 10:00 a.m. with Kansas City Fed Manufacturing at 11:00 a.m. The U.S. sells $14 billion of 10-year TIPS at 1:00 p.m. Nike Inc., Costco Wholesale Corp. and Vail Resorts Inc. are among the companies reporting results. Here's what caught our eye over the last 24 hours. Every day that goes by, we get one day closer to hitting the statutory debt limit. If Congress doesn't vote to hike it, we could theoretically experience the unthinkable: A default on U.S. Treasuries, which are widely understood to be the world's safest asset. People have all kinds of theories for what would happen if we did hit the ceiling, but the truth is that nobody actually knows. Fortunately there's an easy way to defuse this bomb. As I've been writing about this week, there doesn't actually need to be a vote at all. The Secretary of the Treasury can mint a trillion dollar platinum coin, purchase $1 trillion worth of debt from the Fed, retire that debt, and then create breathing room under the debt ceiling. It sounds weird, of course, but it's legal and it would solve the problem of a catastrophic default and potential associated recession.
And since the choice is between "weirdness" on one hand and "catastrophic default leading to a depression" on the other hand, there's a good reason to go with weirdness. Because it's weird, people have all kinds of questions, so here's a short FAQ. Q: Why does the coin have to be platinum?
A: Scroll down to section (k) here, and you can see that the law grants the Treasury Secretary a high degree of discretion when it comes to platinum coinage specifically. Odd yes, but that's what the law says. Q: Would the coin have to be big?
A: Of course not. Dimes are smaller than pennies but are worth more. There's no connection between the size of a coin and its monetary value. Q: Would this cause inflation?
A: No. And I explained this yesterday, and the short version is, because it's just an asset swap between two arms of the government (the Treasury and the Fed) no new money would enter the economy. It's just an accounting trick. Q: Wouldn't it be better to get rid of the debt ceiling entirely?
A: Sure, but that's not the world we live in. That option isn't on the table, so at this point to even bring that up is a distraction and a waste of time. Q: If we can seamlessly swap coins and Treasuries, why do we need a government bond market in the first place?
A: Legit question actually. There are some who argue that we should only do monetary financing, and that the entire Treasury market is unnecessary relic. Q: If debt can just be erased and it's all accounting and we can finance spending by coins, why do we need taxes?
A: Taxes serve other purposes. Progressive taxation can restrain inequality. Taxes can curb inflation by reducing domestic demand. Taxes create value for the currency by creating a need to acquire dollars (you need to acquire dollars to pay your tax bill). Basically, taxes do other stuff besides financing spending. Q: Would people keep buying our debt if we engaged in this budgetary hack?
A: Look at the dysfunction in D.C. as it is. Clearly that's had no bearing on the liquidity and demand for U.S. Treasuries. Just one more random thing isn't going to do much. Q: Wouldn't this be a violation of the separation of powers? Why even go through a budgetary process if the Treasury could do this unilaterally?
A: Paying the debt is different than a budget. A budget isn't just an agreement to spend a certain amount of dollars, but also it involves specific allocations to various entities and projects (like the social safety net, the military, infrastructure and so forth). Only Congress can vote to make these allocations, and nothing about minting the coin would deprive Congress of its role in making these decisions. Q: Wouldn't the Supreme Court declare this to be unconstitutional?
A: For one thing, it's not clear who would have standing to sue. For another thing, we have a Supreme Court filled with textual literalists, and the text is pretty clear on this. And for another thing there's an argument that defaulting on the debt itself is unconstitutional per the 14th Amendment. So this really doesn't seem like much of a concern. Q: Why not mint a $2 trillion coin
A: Yeah, that'd work too. Q: So why don't we just do it?
A: ¯\_(ツ)_/¯ Follow Bloomberg's Joe Weisenthal on Twitter at @TheStalwart Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
⊙Ⓢ▽〖@HuLu~〗 2019 Justicia del ártico PelÃcula Completa En LÃnea released 2019. story: Swifty, el zorro ártico, trabaja en la sala de corre...
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