Treasury to Sell Bills to Bolster Fed Balance Sheet (Update1) By John Brinsley and Rebecca Christie Sept. 17 (Bloomberg) -- The U.S. Treasury said it will sell bills to allow the Federal Reserve to expand its balance sheet, a day after the government agreed to take over American International Group Inc. ``The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve,'' the department said in a statement today. ``The program will consist of a series of Treasury bills, apart from Treasury's current borrowing program.'' Yesterday the Fed announced an $85 billion loan to AIG, in exchange for a 79.9 percent government stake in the largest U.S. insurer. The Fed also has set up several other emergency lending programs to provide Wall Street firms with ready access to funding. The new bill program ``will provide cash for use in the Federal Reserve initiatives,'' the Treasury said. The Treasury said it will sell the new bills using its existing auction procedures, giving ``as much advance notification as possible.'' The bills will not have a uniform fixed term, giving the Treasury the same duration flexibility that it has with cash-management bills. To contact the reporter on this story: Rebecca Christie in Washington at rchristie4@bloomberg.netJohn Brinsley in Washington at jbrinsley@bloomberg.net
Under current circumstances, I am surprised that the Treasury would have difficulty in access to capital! I mean, where do you want your money?
Don't cry for me Argentina.... Let's see, if people shunt treasury, what we have here. Ah.. Credit squeeze on the US government!!!! Now what, if US still need money after a US dollar credit squeeze, guess what we have, IMF step up and lend money to US in Euro!! No better way to go straight to h*ll in financial ruin.
Lets see, the Federal Reserve owns the money that the Treasury prints and passes on at interest to the banks. The Fed can not run out of money, they just have the Treasury print some more. http://www.apfn.org/apfn/reserve.htm Why is it most people dont know this.
They can't do that. The moment they do it even for $10, it is the exact moment US dollar become a piece of paper. If it is that easy to solve the problem, you won't have countries borrowing from IMF.