US Treasury bookeeping help ?

Discussion in 'Economics' started by Onlygold, Mar 19, 2009.

  1. Onlygold



    My first post.

    Need some help about US Treasury bookkeeping as I am thinking about how M1 changes.

    1) Read somewhere that if Treasury needs funds, say to pay AIG 30bln, it needs to issue Treasury bills and auction them off for cash.

    Why this roundabout? If approved by Congress, why not just write check to AIG and it will be credited to a/c of AIG with say BoA. BoA will have its reserve a/c credited (which increases M1).

    2) Or they want to first issue Treasury Bills,etc so they may sell later in OMO sales?

    Best Regards.