The Debts of the Spenders: Devaluing Treasuries

Bailout Bernanke decided to make Treasuries fully exchangeable for Level 3 debt assets. This is not the first time the Fed widened lending portals. Earlier in December 2007, the Fed opened the window with its Term Auction facility - but not to the extent of pledging illiquid, opaquely priced sub-prime debt.

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