March 15 will be an important day.

[Kinser79]

(03-15-2017, 03:04 PM)Mikebert Wrote:

(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.

Not quite. In 1997 Congress removed the requirement for the Treasury to keep them on hand. And they fell out of use in 1971--I've not seen a law so it may be an Executive Order and you know about EOs...

In any event unless Congress passed a law prohibiting the Treasury from issuing United States Notes they could do so if they so chose. The Riegle Improvement Act only removed the requirement that they have some on hand.

(03-15-2017, 03:11 PM)SomeGuy Wrote: US Notes are still legal tender, and are not issued by the Fed.  They're issued by the Treasury.

They still are legal tender, but the Treasury to my knowlege has not issue any since 1996 (by which time they had fallen out of use and were only of importance to those who collect paper currency).