The following headline puts The Onion to shame: “U.S. Fed Now Accepts Credit Card Debt as Collateral”
The Fed is now expanding that list of asset-backed securities to include collateralized car loans, credit card receivables, and student loans. It’s doing so because the lack of demand for bonds backed by those assets has had a real political impact in an election year. Students can’t get loans for American universities because investors won’t buy bonds issued by the banks who made the loans to the students. No funding, no college.
Now the Fed (and the feds) are looking to guarantee a college education to all by absorbing more debt.
What will they think of next?
