In the latest of a long list of stunning events, the U.S. Treasury (or really the American taxpayer) is now guaranteeing that money market mutual funds won’t break a buck”. The Treasury said: “For the next year, the U.S. Treasury will insure the holdings of any publicly offered eligible money market mutual fund — both retail and institutional — that pays a fee to participate in the program.”.

Call it the FMMMFIC for Federal Money Market Mutual Fund Insurance Corporation. The limit is set at $50 billion, although that’s probably a fake number. If a run really did emerge on money market mutual funds the Treasury would front even more money.

It’s a good short-term measure to prevent a run on the Wall Street bank. But what happens later on? The genie is out of the bottle. Is the taxpayer going to guarantee $3.5 trillion in mutual fund assets from here on? (As of the latest figures, $1.2 trillion of that is individual investors; the rest is institutional.) In essence, federal insurance has now been extended to one of Wall Street’s major products.

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“Money market funds play an important role as a savings and investment vehicle for many Americans,” the Treasury said in statement.

Concerns about the value of money market funds falling below $1 have exacerbated global financial market turmoil and caused severe liquidity strains.