Fed may issue its own debt

[c1ue]

Re: Fed may issue its own debt

Communism is religion for ants.

And Capitalism is religion for locusts.

Once the swarms have devoured everything in sight, they all die.

[Chris Coles]

Re: Fed may issue its own debt

And Capitalism is religion for locusts.

Once the swarms have devoured everything in sight, they all die.

And free enterprise is for everyone who values their freedom from both communism and capitalism. If you look at the British Isles for example and all the tiny Market Towns, regardless of the actions of feudalism, those towns are still there with free individuals selling their wares, set out on a stall, face to face with their customers. You see the same thing in Africa with the woman selling in the local markets. No ants, nor swarms, simply ordinary, free, people, salt of the Earth; doing the best for themselves and their families.

Freedom never dies out, not over the centuries.

[rj1]

Re: Fed may issue its own debt

This is about managing the effective FF rate w/o bothering with the Treasury.

In other words, a coup.

I think this comment is very interesting, because Bernanke will be in his position until at least 2010, while the Treasury Secretary will be changing in about a month.

I'm not sure I understand here. What's the Fed really accomplishing if they do this? Do they believe that they have to create so much debt that a shortage of buyers will develop that will drive up the T-bill rate?

[bpr]

Re: Fed may issue its own debt

I'm very bullish on ink.

Seriously, aren't FRN's already Fed debt with infinite maturity?

[grapejelly]

Re: Fed may issue its own debt

I'm very bullish on ink.

Seriously, aren't FRN's already Fed debt with infinite maturity?

sure. But by issuing debt, the Fed can pretend it is not monetizing debt...it can issue debt and buy that debt at the same time in a masturbatory delusion that no new money is being created, that someday the debt will be paid back.

[*T*]

Re: Fed may issue its own debt

sure. But by issuing debt, the Fed can pretend it is not monetizing debt...it can issue debt and buy that debt at the same time in a masturbatory delusion that no new money is being created, that someday the debt will be paid back.

Agreed - it may be a 'sterilisation' illusion to maintain confidence vs. hyperinflation talk.

What is the interest on the fed debt to be backed by though? The Treasury debt is backed by the taxpayer's productivity. The fed debt would be purely fiat, only backed by the ability to print, right? Or would they co-opt the ability to tax too? In which case it would be a coup.