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Without knowing which state it is that you live in it's hard to say the specific reason, but the general reason would be that there are many states that have severe restrictions on the interstate transfer of alcohol. Some states don't allow it at all, unless you're a distributor, others require that you have an in-state license to ship items into the state, and others have various other regulations.Best bet is to check out your state legislature or liquor control board's site to find out what the legal requirements are to have beer or wine shipped in-state.Here's some information I was able to find, by state:Alaska (http://www.dps.state.ak.us/abc/trade.aspx)Alaska does not limit or tax alcoholic beverages brought into this state for personal use and not for resale. Out-of-state suppliers may ship alcoholic beverages to Alaska residents but may not make an offer for sale of alcoholic beverages with-in the state of Alaska. This statutory prohibition extends to print and electronic media intended to be viewed by Alaska residents as well as direct solicitation. This prohibition does not extend to information on web-sites located on ISP servers outside of Alaska. Over 75 Alaska communities have by local option banned the importation or possession of alcoholic beverages. It may be a felony crime to ship alcoholic beverages to those communities. A list of those communities can be found on the Damp/Dry Communities pages of this web site.Arkansas (http://www.dfa.arkansas.gov/offices/abc/rules/Pages/title2SubtitleC.aspx) - closest I could find:Any person holding a permit to sell controlled beverages at wholesaleunder any alcoholic beverage control law of the State of Arkansas shallsell such beverages only to a person holding a permit to sell suchbeverages at retail.Delaware (http://regulations.delaware.gov/AdminCode/title4/regulations-10.shtml)A licensed Delaware importer shall not import alcoholic liquor into theState of Delaware unless said alcoholic liquor is delivered directlyfrom a Delaware licensed supplier by either the supplier, the importer,or common carrier to a licensed Delaware warehouse or warehouses.Hawaii (http://www.co.hawaii.hi.us/liquor/rules.pdf)Any unlicensed adult person desiring a permit to allow the importation of liquor from outside the State pursuant to Chapter 281-33.1, Hawai'i Revised Statutes, shall file an application which shall include an inventory of the liquor to be imported.A fee shall be submitted to the department by the applicant with the application as prescribed in Rule 3-3. This section shall not apply to residents of the state who participate in direct shipments of wine pursuant to state law.residents of the state who participate in direct shipments of wine pursuant to state law.Kansas (http://www.ksrevenue.org/pdf/abckararticle5.pdf)Alcoholic liquor (except beer) transported into state or federal area only by bonded carriers. (a) All alcoholic liquor, except beer, shipped into the state of Kansas shall be transported only by common, contract or private carriers that hold liquor carrier permits issued by the director.Kentucky (http://www.lrc.state.ky.us/KRS/244-00/165.PDF)(1) Except as provided in subsection (2) of this section, it shall be unlawful for any person in the business of selling alcoholic beverages in another state or country to ship or cause to be shipped any alcoholic beverage directly to any Kentucky resident who does not hold a valid wholesaler or distributor license issued by the Commonwealth of Kentucky.(2) A small farm winery located in another state may ship wine to a customer in Kentucky if:(a) The wine is purchased by the customer in person at the winery;(b) The wine is shipped by licensed common carrier; and(c) The amount of wine shipped is limited to two (2) cases per customer per visit.Maine (http://www.maine.gov/dafs/bablo/alcohol_bev/index.shtml)Maine is one of 19 states that regulates beverage alcohol within itsborders. By controlling this product, the State is the only entity thatmay bring liquor into the state.Maryland (http://compnet.comp.state.md.us/Motor_Fuel__Alcohol_and_Tobacco_Tax/Alcohol_and_Tobacco_Tax/Consumer_FAQs_about_Alcoholic_Beverages.shtml)While I'm traveling on vacation, how much alcohol can I have shipped back to me?None, except nationally sold wine whereby you must make arrangements to ship the wine to you through a Maryland wholesaler, using a Direct Wine Sellers Permit. Internationally, no alcohol may be shipped back to you, including wine. See Article 2B, Section 16-506 and Section 7.5-104.Massachusetts (http://www.mass.gov/abcc/faqs.htm)Can an out-of-state supplier/manufacturer (a Certificate of Compliance holder) sell directly to a retailer?No. An out-of-state supplier/manufacturer (a Certificate of Compliance holder) can only sell his or her alcoholic beverages to a wholesaler.Michigan (http://www.michigan.gov/documents/dleg/FAQs_Illegal_Importation_224505_7.pdf)What is the legal allowance for alcohol products being brought into Michigan?State liquor laws require persons who wish to bring any type of alcoholic beverage into Michigan for personal consumption to obtain prior written approval of the Commission with the following exceptions:- A person of legal age who has been outside the U.S. territorial limits for at least 48 hours and has not brought alcoholic liquor into Michigan during the past 30 days, may bring up to one liter into Michigan without prior approval.- A person of legal age may bring up to 312 ounces of alcoholic liquor that contains less than 21% alcohol by volume (about 24 –12 ounce containers of beer or 12 – 750ml containers of wine) from another state without prior approval.Mississippi (http://www.dor.ms.gov/info/faqs/TobaccoBeerandAlcohol.html#w)Can I order wine over the internet to be delivered to my home?No. It is illegal to bring wine into Mississippi and such products will be considered contraband.Note: I'm presuming beer falls into the same category, but wasn't called out specifically in the FAQ.Montana (http://data.opi.mt.gov/bills/mca/16/3/16-3-213.htm)16-3-213. Brewers or beer importers not to retail beer -- small brewery exceptions.(1) Except as provided for small breweries in subsection (2), it is unlawful for any brewer or breweries or beer importer to have or own any permit to sell or retail beer at any place or premises. It is the intention of this section to prohibit brewers and beer importers from engaging in the retail sale of beer. This section does not prohibit breweries from selling and delivering beer manufactured by them, in original packages, at either wholesale or retail.(2) (a) For the purposes of this section, a "small brewery" is a brewery that has an annual nationwide production of not less than 100 barrels or more than 10,000 barrels.(b) A small brewery may, at one location for each brewery license, provide samples of beer that were brewed and fermented on the premises in a sample room located on the licensed premises. The samples may be provided with or without charge between the hours of 10 a.m. and 8 p.m. No more than 48 ounces of malt beverage may be sold or given to each individual customer during a business day.New Hampshire (http://www.nh.gov/liquor/direct_ship.shtml)The New Hampshire State Liquor Commission permits spirits, wine and beer to be shipped into New Hampshire so long as the direct shipper has obtained a permit from the Commission. The permit allows out of state companies to ship alcoholic beverages to citizens as well as Liquor Commission licensees.Oklahoma (http://www.ok.gov/able/documents/T37.pdf)37-505.C.1. Except as otherwise authorized by law, it is unlawful for any manufacturer, wholesaler or retailer of alcoholic beverages, located and doing business from outside this state, to make retail sales of alcoholic beverages to purchasers located in this state or to ship alcoholic beverages sold at retail to persons located in this state.Pennsylvania (http://www.portal.state.pa.us/portal/server.pt/community/direct_shipping/17491)Under the law, only wines that are not available in Pennsylvania may be purchased from a licensed Direct Wine Shipper via the Internet. The PLCB offers approximately 25,000 different wines through its Regular, Specialty, and Special Liquor Order (SLO) merchandise. Before going to a Direct Wine Shipper to order, please check our catalog using the Product Search first.Note: There is no mention of beer in this FAQ; I'm presuming lack of mention in direct shipping means it's not permitted at all.Rhode Island (http://www.dbr.state.ri.us/documents/divisions/commlicensing/liquor/Commercial_Licensing_Regulation_8.pdf)Rule 19(b)(1): All alcoholic beverages brought into the State of Rhode Islandfor resale shall be consigned and delivered to a licensed Rhode Islandwholesaler.South Dakota (http://www.state.sd.us/drr2/propspectax/alcohol/licenses/misc.htm)State law prohibits on/off-sale licensees from making any delivery of alcoholic beverages outside of the premises described in the alcohol license.Tennessee (http://www.state.tn.us/abc/llicensing%20-%20lead%20page.shtml)Non-resident sellers license is for wineries or distillers/manufactures inside or outside of Tennessee borders, shipping alcoholic products to Tennessee wholesalers.Note: As another three-tier state, TN requires that manufacturers sell only to wholesalers, who in turn sell through distributors.Texas (http://www.tabc.state.tx.us/poe/buying_alcohol_from_out_of_state.asp)It is not legal for a person in Texas to order/purchase malt beverages or distilled spirits from an individual or entity outside of Texas and have it shipped into Texas.Utah (http://abc.utah.gov/laws/law_faqs.html)May I bring alcoholic beverages into Utah?No. Under Utah law "alcoholic beverages" include all hard liquor, spirits, wine and beer. Beer and other malt beverage products that exceed 3.2% alcohol by weight or 4.0% by volume are considered "liquor", and beer with an alcohol content of 3.2% or less is defined as "beer".Washington State (http://liq.wa.gov/licensing/direct-shipping-laws)There is no limit on the amount of wine that can be shipped to a Washington consumer. Beer cannot be shipped to consumers.West Virginia (http://www.legis.state.wv.us/WVCODE/ChapterEntire.cfm?chap=60&art=6&section=13#06)§60-6-13. Restrictions on importing into, and transporting liquors in state.Except as permitted by section six of this article and article eight of this chapter, a person shall not import into, or transport in this state, any alcoholic liquors, unless it is:(1) Consigned to the commission;(2) Transported upon the direction of the commission directly to persons licensed to receive alcoholic liquors at wholesale; or(3) Transported into the state or through the state to persons outside the state upon transportation permits issued by the commissioner.Note: The above is intended for educational purposes only, and is not intended as legal advice. Please contact a lawyer licensed in your state and experienced with your area of interest to obtain legal counsel.

Facebook validating the blockchain and crypto currencies in one sense is good.The problem is that this will invite regulation, and regulation only favors the monopolists which means its bad for the distributed model and for innovation generally.What they want of course is for the Securities and Exchange Commission to regulate it. But the SEC does not have the statutory authority to regulate the market for crypto currencies, regardless of their power to harass the innovators in the market for synthetic currencies and transactional tools.A coin based on a basket of different currencies is a synthetic structure, just like foreign reserves are.In the US only the Federal Reserve Banking Coporations have the legislative authority to issue coin. That monopoly was granted by the Federal Reserve Banking Act of 1913. They are the title holder to legal tender.And that of course is the monopoly that needs to be broken for Facebook et al to issue coin.Which is why they are doing this out of Zug Switzerland, and not New York. Zug is a Helvetian fishing term for the right to pull fishing nets out of the water. That is, a titled property right.In the US only the Fed has the right to issue coin. And its a right that they could decide to enforce quite easily.Will China allow a US controlled crypto currency to operate outside their control? Will India do so? Will Russia? Will the UK, France, Germany or Italy allow it?The only place where a “worldwide currency” can exist is where failed States are incapable of capturing tax revenue. If Libra can improve on tax collection in Africa and South America it has a chance. Especially if it brings liquidity to a cashless barter economy.Everywhere else, Sovereigns will not tolerate the competition.I doubt that those with a monopoly on the issuance of coin will go along for the ride either.Having said that, the details are pretty thin. And given the hostility of Sovereign States to Transnational Interests, it might just be that the move is one designed to kill off the taxing ability of said Sovereign States, and turn them all into failed States.Google and Facebook might have the power of economic disenfranchisement by your standard framework practice of “Remove, Reduce and Inform”. Sovereign States on the other hand still have a monopoly on the use of force, and the taxable means by which to raise the revenue necessary to enforce said monopoly on the use of force.The Masters of the Universe want regulation that can lock in their competitive advantage in perpetuity like the Federal Reserve Banking Act of 1913 locked in the near monopoly on the issuance of dollars for the last century.In the DC Swamp, everything is up for sale, tits, ass and your reproductive rights.The US Dollar is not issued by the US Treasury. Its issued by a private for profit stock corporation. Even the Currency of the Land was sold to the highest bidder.If Facebook had the implicit or explicit consent of the current monopoly holders, then they would have registered a US corporation. Which to me means that they are attacking the Sovereign’s ability to collect taxes, and the Monopolist’s ability to control the money supply.The issue of regulation is simple. They will not get any, for regulation is anti-competitive in the extreme, and excludes the existing monopolist, the Fed.EU Socialists gave them regulation over content. Problem is that US progressives have neither control of the Executive Branch, the Judiciary or of Congress. And they lack a Constitutional plurality of the State legislatures or Executives. Which mean they will not get a GDPR like competitive lock out over either social media never mind the currency.What they will get in the US (2020 being the discriminant) is Anti Trust. Extending one monopoly into another monopoly by virtue of the revenue from the first is what the Sherman Act is predicated on.Maybe Facebook & Google are pricing their ability to skew electoral results via search ranking and push notifications, by say 5%. And Libra is the quid pro quo.The valuation is little phat. Its not 2008 in Kansas or Ohio anymore. Twitter got pistol whipped with its own revolver, in 2016. Information flow is no longer under monopoly control.Alternative realities are in play, today.Maybe the the stock holders of the Federal Reserve Bank are also the shareholders in the Libra offering. Maybe they are purposefully Sticking it to the Man under the understanding that you either cannibalize yourself or others will steal your lunch for you.Or maybe Deutsche Bank and Commerzbank are about to blow up under 100 trillion euros worth of unpriceable derivatives, and the Boys in Basel are looking for alternatives for the traditional fractional banking system set up after WWII.The Bank for International Settlements in Basel, aka the bank of bankers set out in March 2019 Basel III Rules, where gold went from a tertiary reserve requirement to the primary, and oil in the ground is worth half what it was worth the day before as a reserve value if valued in dollars.The Basel Committee on Banking Regulations controls the World Bank, the IMF and all Central Banks, private or otherwise, and all report to them. What they have decided is that the leverage must come down.Maybe its the US’s 20 trillion of explicit liabilities and 120 trillion of implicit unfunded liabilities that they are afraid of. Or the equivalent in private debt.The UK is in the throes of Brexit, and Italy has already stated they will start issuing “currency like” financial “alternatives” to the Euro.Fact of the matter is that the Euro is going to go down as the currency that took down those that most benefited from it. Or maybe it just postponed the inevitable.https://www.stiftung-marktwirtschaft.de/fileadmin/user_upload/Generationenbilanz/Key_Results_Honorable_States_2016.pdfAnd you need to add to the above Private debt:Households Debt to GDP - Countries - ListIn other words the current system is in need of a radical re-boot.We will see what can be added to the sovereign default tally soon enough:Digital money will have an impact but regardless all money is fractional to the underlaying assets regardless of how you dispose of them.Sovereigns or those with monopoly on the money supply have the ability to print money, to inflate away losses and transactional costs. When you are inflating away people’s savings there are political compromises to be made.The notion that you take a US dollar already leveraged 1:9 and re-leverage it another 1:9 through the artifice of a synthetic holder of value is fanciful. That would represent an 18:1 leverage. Or in plain donut hole math a 5% movement against you will wipe out the capital.Currencies, stocks, bonds and oil all trade within that 5% daily.Whether Facebook et all have acquired such a monopoly over digital money remains to be seen.In the mean time, Red back or Green back, the dollar bills in my wallet are still good for a latte at FiveBucks. Best part is nobody knows about the Washington’s I threw around with reckless abandonment last time I was in Vegas.Federal Reserve Note:Treasury United States Note:Last dude to print red backs was President Kennedy. Did not end too well for him though…And that is my story and I am sticking to it until such time as green or red backs change hands and I am the beneficiary.Thanks for the ask, always a pleasure.

“Money” in the US has tangible existence in three forms:Coin created by the US Treasury, which still has nothing to do with the Federal Reserve.Bank notes. Functionally equivalent to coins, but have a legal distinction as Bearer liabilities of the Federal Reserve.Ledger balances on Fed mainframes in some secret location. Hard drives and magnetic tapes list balances at Federal Reserve of accounts of :US TreasuryBanks with Master Account agreements with their local federal reserve bank (such as Bank of America and Richmond Fed).A handful of other customers, such as foreign governments’ dollar accounts and international organizations such as IMF.If you only wanted to know “where the money came from,” you can skip the rest of the answer. The monetary base has no physical limit. Money is printed through some COBOL program in some secret bunker owned by the Fed.A Planet Money episode about ACH give a hint about how the Fed works. ACH and checks are cleared through the mainframes. Essentially, the Fed only said “I could tell you where these mainframes are, but then I’d have to kill you.”Episode 489: The Invisible Plumbing Of Our EconomyThe rest of this answer deals with the legal aspects of the bailout. While the Fed could print 100’s of trillions of dollars with ease, they have limited legal authority. It goes into the sausage-making quite a bit, but personally I like knowing exactly how these programs concretely worked.Legal Constraints on MoneyAll three types of money have little physical constraint, but have legal constraints to how much the Federal Government can print and how the money is used.For #1, the “trillion dollar coin” idea was floated because the US Treasury has theoretically unlimited power to create coinage. Obama could not have spent the coin as he saw fit. Spending was set by Congress. But he could have funded that spending with a trillion-dollar coin instead of debt issuance.#2 and #3 is the substantial portion of money. They have no physical constraints but have significant legal constraints. The Fed could arbitrarily credit Bank of America’s account with $500 trillion dollars. Bank of America mainframes could also credit your account with $1 trillion. Bank of America has many layers of controls though to prevent that from happening. BoA’s shareholders and regulators heavily control and audit its books and computer programs.Similarly, the Federal Reserve banks can only act within the guidelines of the Federal Reserve Act. The 12 Federal Reserve banks are corporations for purposes of entering contracts, to sue and be sued, etc., but exist within strict statutory guidelines. The Kansas City Fed can’t just start selling tacos.In normal times, the Fed used two main methods to adjust the reserve balances:Open Market Operations. The New York Fed enters into agreement with its brokers, called “Primary Dealers.” If a Treasury is purchased on open market, the Primary Dealer’s Fed account is credited, usually at a separate clearing bank. Sales of the Fed’s assets conversely destroy money by debiting the bank account.Discount Window, or Lender of Last Resort. The Fed will lend margin to member banks based on the quality of collateral. For example, Treasuries may get 99 cents in margin while credit card loans get less than 50 cents.The Fed has ledgers of Treasuries similar to its ledgers of dollars. So for both OMOs and Discount Window, the Fed has possession of Treasuries on its mainframes.For purchases or lending of non-Treasury securities, the Fed either takes physical possession of the securities (i.e. Promissory Notes) or the Fed’s account at the DTC is credited. DTC is the central securities repository for most stocks, bonds, etc.Bear Stearns and AIG BailoutsIn 2008, the Fed used a dormant clause of the Federal Reserve Act for “unusual and exigent circumstances.” Specifically, the Federal Reserve Board of Governors authorized the New York Fed to backstop JP Morgan’s purchase of Bear Stearns.JP Morgan’s agreement to purchase Bear Stearns aside from $30B in assets.The $30B in assets was transferred to a Delaware LLC called “Maiden Lane LLC.” Bear Stearns/JP Morgan received $30B in consideration from Maiden Lane LLC in exchange for the assets.The LLC was funded with a $1.15B subordinated loan from JPM and a $28.82B loan from Federal Reserve Bank of New York. FRBNY credited “out of thin air” whichever account was used by the LLC and received the first proceeds from the loan. Furthermore, after both the FRBNY and JPM loans was paid back, FRBNY, received residuals.Maiden Lane II and III LLCs were setup to bailout AIG. The terms were generally similar, with AIG transferring toxic assets to the LLC and FRBNY lending a senior note to the LLC. The LLCs’ accounts at their bank were credited “out of thin air.”All three LLCs have paid back FRBNY in full.FEDERAL RESERVE BANK of NEW YORKTARPOther answers mentioned TARP, but this program had nothing to do with the Fed. The Treasury purchased preferred shares of banks with transfers from its Fed accounts to the banks’ Fed account. Treasury funded its Fed account with Treasury auctions.Shadow Banking System BackgroundThe Fed created an alphabet soup of programs which backstopped far more debt but made less headlines. The programs were: TAF, CPFF, AMLF, MMIFF, PDCF, TALF and TSLF. The Treasury also had a short Money Market Fund guarantee.Credit and Liquidity Programs ArchiveIn general, these programs backstopped the “shadow banking system.” The shadow banking system had replaced typical bank deposits for institutions with large cash balances. For example, a pension fund could:Put cash balances in a Money Market Fund instead of a traditional bank.Ask its custodian bank to lend its securities. I.e. a hedge fund could short Apple by borrowing a share from CalPERS. The hedge fund has to pledge 50% margin in case Apple goes up in price. The Custodian Bank now has a substantial amount of cash.The MMF and custodian bank then invest in Repo or Commercial Paper.Repurchase Agreements (repo): The MMF/Custodian Bank purchases securities with the promise to buy them back. So $100 mil in securities could be purchased for $94.97 million. Then the counterparty promised to buy back the securities for $95 million the next day. The $0.03 million “haircut” is the interest. Technically, most repo was also tri-party repo, with either JP Morgan or Bank of New York standing in the middle.Commercial Paper: Commercial Paper is a short-term loan with a guarantee by a bank such as Lehman Brothers. A lot of toxic assets were bought by a shell corporation (“SPV”). The shell corporation then issued commercial paper with backing by a bank such as Lehman. This is known as Asset-backed Commercial Paper (ABCP).A true bank has a charter from either OCC or a state charter. Bank accounts had 10% reserve requirements and, before 2008, these reserves yielded 0%. So institutional funds yielded more from their cash balances by using the shadow banking system.The stress on ABCP and Repo began in 2007 with BNP Paribas suspending withdrawals on hedge funds with toxic assets similar to ABCP and some Repo agreements. Starting in 2007, the cost of Repo funding went up and investors demanded better collateral.The Fed introduced the alphabet soup of programs under “unusual and exigent circumstances” to get around the fact bank runs happened to non-banks. While Repo and Commercial Paper were used instead of bank deposits, they did not have the statutory access to the Discount Window.Term Auction Facility (TAF)TAF was instituted in December 2007 under pressure from repo funding. It was merely a different form of discount window, where banks bid on a set amount of discount window funding. The banks who bidded the highest interest rates bid received the funding. From the Fed’s perspective, the program was needed to hide which banks needed liquidity.As with the discount window, the Fed could credit the bank’s Fed accounts out of thin air while taking possession of the collateral.Term Auction Facility (TAF)PDCF and TSLFBear Stearns failed so suddenly because it relied on overnight Repo agreements for funding its balance sheet. By early 2008, the repo market had contracted to only accept Treasuries as collateral. Bear Stearns also started losing traditional bank credit lines.Without the Fed’s intervention, JPMorgan would have stopped clearing trades for Bear Stearns. Bear Stearns was not a chartered bank. Broker-dealers had to settle cash for trades using a clearing bank. Without a clearing bank’s constant short-term credit, a broker-dealer must declare bankruptcy.After Bear Stearns, the Fed put in place the Primary Dealer Credit Facility (PDCF). Essentially, PDCF gave the same terms to non-bank Primary Dealers as the Fed gave banks with its discount window. Administratively, it was a tri-party repo agreement between the Primary Dealer, New York Fed and one of two clearing banks (JP Morgan or Bank of New York).So Merrill Lynch could transfer a corporate bond to JP Morgan, with JP Morgan having that account in the name of the New York Fed. The New York Fed then credits out of thin air Merrill Lynch’s account at JP Morgan, through JP Morgan’s account at the New York Fed.The Term Securities Lending Facility (TSLF) was similar, but involved swapping the Fed’s Treasury bonds for Agency Mortgage-Backed Securities (i.e. Fannie/Freddie) and AAA non-Agency MBS. The Primary Dealer would transfer the collateral to their clearing account, likely using DTC. The Fed would transfer Treasuries it owned previously to the clearing bank. Then the clearing bank would swap the ownership of the two securities. At maturity, the loans would swap back given the auction rate.US Treasury Money Market Fund GuaranteeEven with the PDCF and TSLF, Lehman declared bankruptcy after JPMorgan and Citibank stopped clearing their trades. The Reserve Primary Fund held Lehman-backed Commercial Paper and “broke the buck,” where a share went below $1.00 NAV.On September 19, 2008, Hank Paulson used an expansive reading of the Exchange Stabilization Fund to backstop up to $50 billion in losses on Money Market Funds. Like TARP, these funds were from Treasury Auctions or taxes, and not “out of thin air” like the Fed programs.Treasury Announces Temporary Guarantee Program for Money Market FundsAMLFAlso on September 19, the Fed started the ABCP Money Market Mutual Fund Liquidity Facility (AMLF) to help MMFs get liquidity for withdrawals. This program was administered directly with Fed members who had purchased Commercial Paper from a Money Market Fund. The ABCP had to have been rated the highest rating by two ratings agencies (A-1/P-1/F-1).The loan was non-recourse. So when a bank purchased ABCP from a MMF, it took no risk by taking the loan from the Fed. The Boston Fed administered the program. Administratively, the Boston Fed would credit the borrowing bank out of thin air and the borrowing bank would transfer the ABCP to the Boston Fed’s account at DTC. At maturity, the bank would have to repay the loan amount. However, since it was non-recourse, the bank can default on this loan and the Boston Fed can only use the collateral for repayment.CPFFThe Commercial Paper Funding Facility (CPFF) commenced in October 2008 due to the market for new Commercial Paper drying up. While AMLF funded previously issued Commercial Paper, CPFF funded Commercial Paper directly from the issuers.In administrative terms, the New York Fed engaged PIMCO and State Street to set up the facility. The New York Fed first worked with one of their Primary Dealers to create the trade agreement with the issuer. So Harley-Davidson (yes, one of the program recipients) could make an agreement with Goldman Sachs to sell $100 million in new Commercial Paper to Goldman Sachs’ client, the New York Fed.A shell corporation, CPFF LLC, was created by New York Fed to take beneficial ownership of the Commercial Paper. The New York Fed made recourse loans equal to the purchase amount of each transaction. CPFF LLC in turn used State Street as a Custodian Bank. So these recourse loans were funded out of thin air to State Street’s accounts on behalf of CPFF LLC.The money then flew from State Street’s accounts to DTC’s clearing account for State Street and then to the issuer, such as Harley-Davidson. The issuer’s books would have the Commercial Paper registered to Cede & Co., the nominee of DTC. Then DTC would credit that Commercial Paper to State Street. Finally, State Street held the assets to credit CPFF LLC.MMIFFMoney Market Investors Funding Facility worked directly with MMFs to buy their financial institution liabilities, such as CDs and commercial paper. Apparently, even commercial paper issued by banks was strained in 2008.There are fewer details easily available on this program. It set up a minimum of five shell corporations (SPVs). Their custodian banks were credited out of thin air by the Fed. Then the SPVs purchased these financial institution liabilities from eligible funds. Ultimately, these SPVs allowed these MMFs to meet redemptions where otherwise the market would be strained.TALFTerm Asset-Backed Securities Loan Facility began operation in March 2009. It created an SPV called TALF LLC which received a loan from the New York Fed. As before, its custodian was credited the money out of thin air. TALF LLC then purchased AAA tranches of Asset-backed Securities backed by assets other than mortgages (such as credit cards, auto loans, student loans, etc.)This program got the nastiest headlines since many counterparties were very wealthy or foreign. But the Fed would maintain the true beneficiaries were the ultimate borrowers.ConclusionLost in the sausage-making here is why unemployment went to 10% in the US. Isn’t that what it’s all about? In short, the Fed constantly tries to meet an inflation target by printing or destroying money. Prices are set by both supply and demand curves. However, the money supply can only affect the demand side. It can print more money and usually that money will get spent.Before 2008, “lowering interest rates” really meant the Fed crediting accounts out of thin air in exchange for T-bills. This new money yielded 0% and so usually the money was spent on other securities. Interest rates went down due to higher demand. Ultimately, the new money was spent on real consumption or investment.In September 2008, the Fed hit the zero-lower bound. It could print money and buy T-bills, but the T-bills already yielded 0%. The market demanded cash so much that it was fine getting 0% on T-bills. Now, typical OMOs had no effect on demand.Declines in demand at the zero-lower bound also had a positive-feedback cycle. The math does not work with everyone demanding a fixed amount of liquidity. If demand for cash goes up, then the price of cash goes up. The “price” of cash is really the price of everything else going down.The Great Depression happened due to demand increases for gold world-wide. In that case, deflation was 50%. If markets were perfect, 50% deflation wouldn’t matter since wages would decrease to compensate. Instead, unemployment went up to 25%. Real-world employees have strong expectations of consistent nominal wages. So with 10% revenue declines at a company, the managers are likely to cut employees or hours rather than cutting per-hour wages.So, the details of backstopping the banking system (real and shadow) are somewhat slimy. The structure of Federal Reserve banks is almost certainly unconstitutional under the Appointments Clause. Although the Board of Governors oversaw most of these programs, the unconstitutionally appointed Bank Presidents had significant influence.These programs backstopped trillions in debt and often used a select number of private corporations to administer them. There was no real oversight of the Board of Governors provided under Section 13(3). Section 13(3) was later overhauled by Dodd-Frank.In the end, I would favor not having bailouts at all. Do not even have the Discount Window, even though lender-of-last-resort goes back to the 1800’s. Don’t even have the FDIC. The last one sounds particularly crazy, but the FDIC was the on bank bailout that cost the government money.But we must have an unassailable monetary policy at the zero-bound. Given how much damage was caused by 2008, it is criminal that the entire economics profession is not focusing on how to get around the zero-bound.At the zero-bound, I favor the “helicopter money” proposal Bernanke gave for Japan in 2001. When rates on Treasuries and Agencies are zero, then credit payroll tax and Social Security recipients with money out of thin air. Helicopter money happened indirectly anyway with the 2008–2011 deficits and then the Fed purchasing trillions in Treasuries. Credit everyone’s accounts as a last resort and until general economic measures recover.Furthermore, 100% reserve banking (such as the pending TNB bank) should be favored for cash accounts of regulated institutions, such as pensions. Banks and Commercial Paper would no longer have an exemption for Securities Act registration. So regular depositors would generally have 100% reserve accounts as well. Demand deposits with mismatched maturity assets could not use words such as “bank deposits” in any marketing, including to “sophisticated” investors. These short-term liabilities would need to be registered and underwritten like other bonds, unless only sold to sophisticated investors. In general, have a great mindfulness of the inherent fragility of maturity mismatch.