I missed the stories of how the FED wanted to be able to issue its own debt. Seems like the story has been around since December of 2008. No one knows clearly who the movers and shakers of this entity are. These people who never probably worked a day in their lives, but are just some generations of money making magicians behind the scenes of what is moving the world (toward ruin, I suppose).
They do not get to do this. There are no rules on the books to date, that allow the FED to effectively have the same powers as the US Treasury. Why do they get to mull over this idea? A bloomberg story reports that they are now retreating from this position.
http://www.bloomberg.com/...
Yet seeking the power may lead to other legislation. The Senate in April passed a nonbinding resolution asking the Fed to identify borrowers, a move Bernanke has said would be "counterproductive" and result in "severe adverse consequences" for the economy.
Some stories read that the FED is low on reserves after having bought up toxic debt from giants like AIG. Some detractors are calling for Bernanke to resign. Some are saying if the FED gets this power it is effectively a coup of the sham US government.
Other comments:
And what would this debt be backed by? Nothing?
Then nobody would buy.
Full Faith and Credit (directly or indirectly by obligating the currency of) United States? That's a problem.
The Federal Reserve, a private bank, is asking for permission to issue debt in the name of the taxpayers of this nation, obligating them to pay it down and cover the interest on same, without oversight as to how the proceeds are used and under what limits and terms it is issued?
You're kidding me, right?
If this report is real and Congress does not immediately disavow this attempt - publicly - we no longer have a Constitutional Republic.
http://market-ticker.denninger.net/...
From the Wall Street Journal:
The Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets...
Fed officials have approached Congress about the concept, which could include issuing bills or some other form of debt, according to people familiar with the matter.
It isn't known whether these preliminary discussions will result in a formal proposal or Fed action. One hurdle: The Federal Reserve Act doesn't explicitly permit the Fed to issue notes beyond currency....
At the core of the deliberations is the Fed's balance sheet, which has grown from less than $900 billion to more than $2 trillion since August ...In the early stages of the crisis, officials funded their programs by drawing down on holdings of Treasury bonds...
The Fed also has turned to the Treasury Department for cash...More recently, the Fed has funded programs by flooding the financial system with money it created itself -- known in central-banking circles as bank reserves -- and has used the money to make loans and purchase assets.
Some economists worry about the consequences of this approach. Fed officials could find it challenging to remove the cash from the system once markets stabilize and the economy improves. It's not a problem now, but if they're too slow to act later it can cause inflation.
Whatever the ramifications of the FED wanting to be allowed to do this, whether or not it is legal for them to do this, there is definitely something amiss, and this is a topic that needs monitoring.