Federal Reserve Running out of Reserves

I really do not know what all the side affects of this will be. It is on the scary side that we are backing ourselves into a corner.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQty_l4.z_1M&refer=home

As if a slowing economy, a falling dollar, faster inflation and a credit crunch weren't enough headaches for U.S. Treasury Secretary Henry Paulson, he now has to worry that the Federal Reserve will undermine the return of the one-year bill.

For the first time since 2001, the government will sell 52- week debt tomorrow, expanding its source of funding as the budget deficit approaches a record. The Fed is selling Treasury bills at the fastest pace since it was founded in 1913 to support bank-lending programs meant to boost confidence in financial markets. The Fed owns $34.3 billion of the securities, down from $267 billion, or 27 percent of the market, in December.