More on this on Monday's show but...

Did you know the FED has about $1T in assets, mostly (90%) in treasuries, at least 8 months ago. They now have less than half that with the balance made up of a collage of CDO's, MBS's and other "difficult" to value collateral. The term "Level 3 Assets" really do not do justice to the nearly impossible to value transfer of bad paper for good (relatively) treasuries.

And, yes, when the FED runs out of treasuries they go right back to the Treasury and ask for more. How does the Treasury fund the FED? They borrow and issue the treasuries to the FED.

And when the Treasury borrows, the US debt increases and the US debt service increases and the US deficit increases and you either owe more or pay more taxes.

No matter how it goes, you pay.

This is really simple stuff when you follow the money.