Ever since interest rates spiked up over the last year, every central bank is now paying out more in interest to depositors than it earns on its bond portfolio. For the U.S. Federal Reserve, those losses are now over $130 billion. In an attempt to get around the elephant in the room, the Fed has created a “deferred asset” which is a promise to pay back all those losses once interest rates fall and they can once again earn more that they pay out. Accounting gimmicks are such a sweet deal when you hold all the cards. Here’s a link to the chart at the St. Louis Fed.
This isn't a meme stock, some third world country's currency, or the balance sheet of a failed regional bank – it's the losses at the Fed, and it just exceeded $130 billion: pic.twitter.com/X2BIeJOUyH
— E.J. Antoni, Ph.D. (@RealEJAntoni) December 28, 2023
Losses Shmosses. The Fed is bankrupt, morally, ethically and financially.
That rubicon was crossed in 2008.
As my neighbor just reminded me … my home value hasn’t gone madly higher … rather, the value of my dollar has plummeted.
Do you suppose I can defer payments on my line of credit until interest rates come down?
Yeah, y know, we have like, trillions in assets.
And courts, judges and your computer memory.
part of my final retirement plan is to build build build a very high credit limit on as many cards l can, max out the cash advance, any lines of credit or other loans ALL AT ONCE, put it in a shoe box or buy gold, then claim l ‘lost it all at the track’ or ‘got drunk and got rolled on my way to the car dealership’
trust me. l have autism and spent decades observing peoples faces in a very thorough and deliberate manner to know what to mimic. l also lie for no reason except to get real good at it. thus when under interrogation by bank officials l can bluff bluff bluff.
the good news: my daddy God bless him told me the rule about gyping people and l follow it. cheat the big boys, not the little guy.
illegal unethical unfair unrepresentative ununfair whatever.
when cr card interest rates ‘next stop’ is 30 friggin percent a the same time bank of canaduh is less than 2, that is all the motive l need.
Given the spread they previously earned from 2002 to 2020, that $130 billion is unpayable in any normal time frame.
It would be interesting to see how bad the bank of canada is as well.
Bidenomics made us do it is the Fed refrain. It was essential to save “our democracy,” aka DeMarxist rulers.
The US Fed holds a huge chunk of the US federal debt that fiscal fascists of Bidenomics inflicted on taxpayers.
Federal debt held by Federal Reserves exploded as the convenient covid crisis set statists largesse lapping.
It had risen 250% from the dark days of the successful Trump presidency, though has dropped 15% from 2022.
https://fred.stlouisfed.org/series/FDHBFRBN
Similar to Canada, with our cynical collectivists keeping new debt under 5 year maturities, yet another fiscal time bomb from spendthrift statists who feather their own nests to increase their power at our expense.