Selling debt.........by Rico

There wasn't much attention paid to the 'new' record set the week of 6/22 when the US sold a record $104 billion in notes and bonds (debt). It must have been too puny a number to catch the attention of the MSM, and besides there was important stuff happening...Prancing With the Stars, or American Idiot, or this Michael somebody, or whatever.

Well, here is a NEW 'new' record for you! 7/24 the USG will try to auction off $115 billion of notes and bonds (debt). The most ever (so far).

The USG selling its debt is nothing new, what is 'new' are the staggering amounts of debt Uncle Sammy is trying to lay off....er, sell, and the accelerated pace he's trying to do this at.
- The USG has more than DOUBLED note and bond offerings in the first half of 2009, and is looking at trying to sell another $1.1 trillion by the end of 2009.

To quote one bond market pundit: "That's a LOT of paper!"

What if they cannot sell all this debt? No problemo! The FED will buy it! Foreign Central Banks have indeed been trimming their purchases of US debt, but check this idea out.
How crazy is this?
BORROW THE MONEY WE DON'T HAVE FROM OURSELVES!!!!!!!
- The FED purchases the debt from the Treasury. No problem.....right? The FED currently holds (week ending 7/8) $1.33 trillion of this paper. Not exactly IOU's as Kali-foh-niya uses them but more along the lines of "I Owe Me" (IOM). Much sounder fiscal policy, that ["I promise to pay myself back someday." WARNING: Do not try this at home!].

There are actually stacks and stacks of these I-Owe-Me papers floating around our government, the concept having worked so well in past for useful things like taking actual cash from the (former) Social Security Trust in exchange for these 'promises' (thanks to the Capitol Hill Clown Posse).
- Voila! Cash disappears. I promise to pay you back someday notes appear. It's simply magical, I tell ya! Boy, those politicians are SMART!