Today’s headline in the Financial Times, “U.S. LACKS CREDIBILITY ON DEBT-SAY IMF.” I rarely agree with the IMF but on this issue as the readers of NOTES are aware, I can find common ground with the economists at the world’s commentator on global economics. It is easy to say the U.S. lacks credibility when the world is observing the budgetary circus that has visited Washington, D.C. for the past two weeks. The CREDIBILITY issue is not solely with the president and the legislature but also with the FEDERAL RESERVE. If the FED errs in its aggressive monetary easing it will be a horrendous blow to the U.S. and the global financial system. The FED has so much at stake because it has more than $2 trillion of DEBT INSTRUMENTS on its balance sheet and if the U.S. is deemed to be an unworthy borrower just what will the value of those assets be on the market.