And Biden wants to add $6 tril more.
Ain’t it grand?
If the Fed raises interest rates the federal budget deficit goes into a death spiral as interest costs eat up a higher and higher percentage of the budget.
The Fed has painted itself into a corner—and they will stay there until there is hyperinflation.
They will then say: “We never saw it coming.....”
The Federal Reserve is like the banker in the newly revised Monopoly game where the banker gets to print an unlimited amount of new dollars and also gets to inflate the prices of the hotels, houses, and railroads.
The holdings illuminate the increasing role the central bank is playing the economy as the United States weathered the 2008 financial crisis and COVID-19. Do they even have anyone read these before they publish.
The “balance sheet” of the Federal Reserve is almost entirely Treasury Bills. The government “lending” itself money, that putatively will be paid back in the future. This is the same thing as just printing money, something that the government is not allowed to do. It’s like being a little bit pregnant.
I’d be more worried about deflation.
And they continue to create several billion new dollars every day. What could go wrong?
All they have to do is to tap a few keys on a computer and then they their balance will jump to $80 trillion.
“We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances.”
—
The Federal Reserve is apparently legally blind.
8 trillion in “assets” = 8 trillion dollars of US government bonds.
And the debt is supposedly $26t. In the business world, your BANKRUPT.
Bump for later.
“The holdings illuminate the increasing role the central bank is playing the economy as the United States”
Translation: “We’re having a hard time selling out debt to other people.”
What the Federal Reserve has been doing is buying parking lots at bank for a $1 billion as “holdings”.