As we say here on FR, this could be “hugh and series”.
But does it really matter? The checks won’t bounce and the Fed will be around next week to pick up the unsold Treasuries.
What I would like to know is what happens when the Fed ends this support for Government debt. That’s the real question - they can’t go on printing $Xerox forever.
Even Ponzi schemes have cashflow problems. If the Treasury runs out of cash, because outflow has exceeded inflow for too long, and if the Treasury is not authorized to sell securities, whether to the Fed or China, then the checks SHOULD bounce.
We have had occasions in Kalifornia when the state started issuing IOUs instead of payments and for a while some banks would accept them, expecting payment at a later date.
If banks are willing to cash checks for the federal government without the government having the authority to create such debts, then our debt ceiling would become absolutely meaningless. From that point on, we wouldn't even need to have the Fed buy the debt. Just print the checks.
I thought it was all digi-dollars anyway.
Just add a few more digits here and there, and, voila! Instant money! /s
But running out of REAL cash? wow
Bennie and the InkJets, running out of ink. amazing