by Treasuries has grown will never be offset by a period of increased seignorage, and that absence will represent seignorage gains due the public but captured by private parties. IA -- I don't disagree with you, but you're a bit more cynical than me (and it's pretty hard to be more cynical than me about this stuff!). You may be right that the Fed will do what it will do, serve certain interests and ignore others, regardless of the consequences. But even if you are right, it's a Pascal's wager kind of thing. It doesn't hurt anyone to have people like me tilting against the windmills... How, then, to make it maximally profitable for the fourth estate of today to muckrake? Imho, the key insights: 1) The introduction of particular online markets, starting with a new kind of market for the ad spaces on blogs, will provide people with new and improved ways to develop, showcase and profit from expertise. 2) Owning popular markets of the aforesaid kinds is an ideal way to increase profits for an American media conglomerate that owns a broadcast TV network. 3) The less benefit individual speculators can derive from moral hazard, the more they will utilize said markets. If you think about it the reverse MBS swap is a fancy way of saying that the Fed should step up and guarantee the mortgage securities. That is precisely what you are doing. First you give out tsys for mortgages, then you take the same mortgages