Toolmaker Bernanke Is At It Again: Fed Wants to Issue Direct Debt

The very strange Ben Bernanke is apparently circulating a very strange proposal that calls for the Fed to directly issue debt.

WSJ reports:

The Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets...Fed officials have approached Congress about the concept, which could include issuing bills or some other form of debt, according to people familiar with the matter.

Since the Treasury can borrow money and deposit it at the Fed, and, further, the Fed can print any amount of money it desires, it is not clear exactly what this Bernanke initiative will accomplish other than create some kind of financial masturbation tool for Bernanke.

Bernanke better watch out with all these new financial "tools" he is creating. It's possible one of them won't be completely thought out and will result in all sorts of unintended consequences.