And Now… A 50-Year Bond?
September 8th, 2011Check kiting is the illegal act of taking advantage of the float to make use of non-existent funds in a checking or other bank account; it is a form of check fraud. It is commonly defined as intentionally writing a check for a value greater than the account balance from an account in one bank, then writing a check from another account in another bank, also with non-sufficient funds, with the second check serving to cover the non-existent funds from the first account. The purpose of check kiting is to falsely inflate the balance of a checking account in order to allow written checks that would otherwise bounce to clear.
Via: CNBC:
With the Federal Reserve widely expected later this month to unveil the latest weapon in its easing arsenal, expectations are ranging from Operation Twist, a variation called Operation Torque, and to a 50-year Treasury bond.
A 50-year bond? While the idea seems radical even for a central bank carrying a $2.8 trillion balance sheet, the idea of the Fed going that far out on the yield curve in a desire to stimulate the economy is drawing market chatter.
The purpose of the bond would be to extend the duration of the Fed’s otherwise short-term debt portfolio. In theory it would take the pressure off the central bank from having to roll over its debt on a continual basis.
