And so it goes…
As America’s financial system spins nearly out of control, the Fed, whose balance sheet is weighted down with the detritus from Bear Stearns, the new borrowing facilities for investment banks (on junk collateral), and now, AIG’s $85 billion nut, needs to borrow money from – guess who? – the Treasury Department (aka, the taxpayer, aka, you)!
From Treasury Department press release:
The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury’s current borrowing program, which will provide cash for use in the Federal Reserve initiatives.
Oh, and in case you hadn’t noticed, the Treasury is empty. Inside that fancy building in D.C. is a big IOU note written in Chinese. Those T-bills? They’ll just be added to the total.
America has never saved for it’s rainy day and now it’s pouring.
You don’t know it yet, but you’re getting soaked.