2 thoughts on “The Trillion Dollar Coin

  1. slothrop

    Hey Keith,Do you think this could be a ploy to give the Fed cover to at least start to unwind its balance sheet? It could make up for the new issuance of treasuries by selling what it has. This is nuts. I feel like I’m living in a Pirandello play.

  2. Keith Weiner

    Hi Slothrop,I agree it’s madness.I would not care to speculate about the conspiracy aspects of this. But I do not think the Fed wants to unwind its balance sheet, as this would have massive consequence to every credit market. It is almost impossible to overstate the importance of the Treasury bond and the number of uses it has not just in the US but worldwide. I delve into this a little in this paper.I the regime of irredeemable paper, credit expansion is a ratchet that must only be allowed to go in one direction.


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