[David]

This article is a disertation by the Dallas Fed on the practical methods by which the fed could impose a carry tax on unspent money--your savings account; your general depository savings and soforth; your checking account. If you keep money savings, the fed would impose a carry tax on your savings in order to incentivize you to spend the money.

Outrageous!

The paper is a demonstration that someone at the fed has thought through the pratical ramifications of how they would do this. I tend to doubt they would follow through--ever. It is part of a Greenspan effort to jawbone what he perceives as disinflation.

You also need to wonder about the concept in the climate of today's bond market movement--the 10 year T Bond rate went up 7.4 basis points which is a large move in any economic climate. Certainly a move contrary to deflationary expectations.

[Ciexyz]

Am reading everyone's comments with interest.

[Tauzero]

"Certainly a move contrary to deflationary expectations."

Not necessarily.

The prescriptions detailed in the paper would be absolutely disastrous.

If they are seriously being considered, a flight from treasuries (or any other dollar-denominated asset or claim) would be a rational response.