that the US could avoid such a fate without the FED/government. There is practically no private demand for non-government debt. Private debt is being funded exclusively by the discount window, TSLF, TAF, FNM, FRE and FHLB. A few weeks ago treasury general collateral came close to trading at negative rates. Obviously, negative rates on nominal governemnt debt is only rational because people fear not getting their money back. The cycle had (has?) to be broken. Finally, I must admit that I underestimate the possible political and moral hazard side effects of the FEDs operations. That isn't my bailiwick as I am more concerned and involved in the financial plumbing. I am open to alternative suggestions for clearing up this seize up in the financial markets but I am not sure the non-FED side of the government is up to the task. Thank you also for your thoughtful response. I agree the use of the word "windfall" was a poor choice conveying the wrong idea, having hesitated on it momentarily before pressing "post comment" in laziness. I do think it's somewhat debatable whether the idea of "good collateral" has been breached unambiguously at a technical level. I think it is a question of degree more than a question of stepping over a line. I say that because the range of collateral "normally" acceptable at the discount window is very broad, as I'm sure you're aware. It's not clear to me that this range has been materially expanded, if at all, in