Fed Preparing For US Default Says Plosser

Discussion in 'Media' started by hvactec, Jul 21, 2011.

  1. hvactec
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    hvactec VIP Member

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    That giant whooshing, and humming, sound you hear are all the printers at the basement of Marriner Eccles getting refills and start the warm up process. Because according to the Fed Charles Plosser the Federal Reserve is actively preparing for the possibility that the United States could default. Which can only mean one thing: an immediate paradrop of millions of $100 bricks to every man woman and child in the US since as we all know by know Tim Geithner has repeatedly confirmed the Treasury has absolutely no default plans. None.

    Per Reuters:

    Philadelphia Federal Reserve Bank President Charles Plosser said the Fed has for the past few months been working closely with Treasury, ironing out what to do if the world's biggest economy runs out of cash on August 2.

    "We are in contingency planning mode," Plosser told Reuters in an interview at the regional central bank's headquarters in Philadelphia. "We are all engaged ... It's a very active process."

    Plosser said his "gut feeling" was that President Barack Obama and Congress will come to an agreement to increase the Treasury's borrowing authority in time to avert a default on government obligations.

    And in addition to the warming up, the Fed is also engaging in the following:

    The Fed effectively acts as the Treasury's bank -- it clears the government's checks to everyone from social security recipients to government workers.

    "We are developing processes and procedures by which the Treasury communicates to us what we are going to do," Plosser said, adding that the task was manageable. "How the Fed is going to go about clearing government checks. Which ones are going to be good? Which ones are not going to be good?"

    read more Fed Preparing For US Default Says Plosser | zero hedge
     
  2. Big Fitz
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    Big Fitz User Quit *****

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    well let's just not cause a panic while we're at it. :rolleyes: This is going to do wonders for consumer/investor confidence. Yeesh.
     

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