As long as there are tax payers the FED will never run out of money. They print it and hand it out and tax payers pay the interest on it. The $200 billion is in the form of T-bills and bank entry credit (which is the same thing).

The FED is not taking bad loans off the bank’s books (that is totally inaccurate). They are creating a market for subprime based derivatives. Since no one is buying these loan based investment products on the secondary market anymore, they announced that Investment banks could use their inventory of subprime mortgages as collateral for credit/cash.

In other words, since no investors would continue to buy these derivative products, they created a way for tax payers to buy them instead – hoping it would unplug the credit blockage.

This should enrage all tax payers since the FED is not a government agency answerable to tax payers. What right do they have to pledge our full faith and credit in this manner? Oh yeah, The Federal Reserve Act of 1914.