Bernanke to buy Treasuries...with Treasuries?
Tired of pushing interest rates asymptotically toward zero, Bernanke said today that the Fed may buy Treasuries to help boost the economy.
So we've been funding the bailouts by opening up the Fed's printing presses and increasing our debt load. Now we're cranking out more dollars to lower our debt load? We're similar to a company that does a stock offering only to buy the shares right back...it's like we're buying Treasuries with Treasuries. More to the point, we're talking about inflating our currency to make our debt position look better.
Crazy. If you're question is, "Are we mortgaging our future again?", Berkanke's got an answer for you (from the Bloomberg article below...note that we'll surely be using this quote to chastise him a year or two down the road):
The Fed’s balance sheet “will eventually have to be brought back to a more sustainable level,” Bernanke said. “However, that is an issue for the future; for now, the goal of policy must be to support financial markets and the economy.”