03-15-2017, 03:04 PM
(03-15-2017, 03:01 PM)Kinser79 Wrote:(03-15-2017, 02:51 PM)Mikebert Wrote:(03-14-2017, 06:24 PM)Kinser79 Wrote: Or perhaps, and this may sound crazy but it's been done before....since the treasury can issue notes bearing interest then surely they can also issue non-interest bearing notes of non-debt.
https://en.wikipedia.org/wiki/United_States_Note
While potentially radical and possibly subject to abuse it would solve the bill paying problem.
I don't think so. What private party would buy non-interest-bearing paper in a world of still positive inflation? The Fed is barred by law, I believe, from doing this.
The last time we had one of these it was non-event that the market completely ignored. Looks like they are ignoring this one too. I will point out that the market also ignored Y2K, which led me to believe it was going to be a non-event, which it was.
Mike....
United States Notes were not paper that were bought. They were paper that the treasury issued. For Example: Government wants to buy a pound of steel (it doesn't matter why or for what reason it just does) the cost is X dollars. So the government buys it and pays in United States Notes for X dollars.
Would it lead to positive inflation? Sure. But if this is an acutal event I don't think inflation would be the key concern here. But it would definately prove that the debt ceiling is nonsense and would put pressure on the Federal Reserve Bank. Which I would like to point out is neither federal, nor a reserve and probably isn't even a bank.
Yes and that is what is barred by law.