$114 billion you say. How much have we given to Ukraine?
You can lose all the money you want if you have a printing press in the basement.
These days it is just keystrokes on a computer.
History: one of the prime reasons for the American Revolution was a central bank; the Bank of England.
The Founders abhorred central banks. The United States of America didn’t have one until 1913.
Propaganda.
Governments don’t produce fiscal ‘losses’, only excessive expenditures.
In a sane world heads would roll and new people would fill key positions both in DC and the bureaucracy.
We are doomed.
Instead, the Fed created an IOU in 2022 that it calls a “deferred asset.”
But not both to the same person.
“unaudited “
There is the keyword. The fed cooks the books and lies to the American people.
And the printing presses go Brrrrrrrrrrrrrrrrr!
I bet they gave the chief operating officers huge bonuses.
If $114,300,000,000 is what they are admitting it is likely ten times that.
How do you lose money when you have a printing press?
Hamiltonians most affected!
So how exactly does the fed lose or make money?
What exactly are the transactions that the fed is involved in that cause it to make or lose money? What’s all the fuss about?
In this case, the fed bought a bunch of bonds when they were yielding a much lower dividend rate, like 2%. They still hold trillions of them.
Their asset is what these bonds are worth at today’s interest rates which are closer to 5%. Because the value of a bond is inverse of the dividend rate, that means that those bonds are worth less today than when they bought them with money they printed.
So all this “loss” is a “pretend bookkeeping” entry, because assets for the fed are always whatever it needs.
For a real bank this would be a real problem. It’s exactly what happened to the Silicon Valley Bank. They had “invested” in a lot long term bonds paying very low rate, so with the the rates shooting up, their balance sheet took a nosedive, which caused a bank run which they couldn’t cover because the value of their bonds had shrunk so much.
But there ain’t going to be any run on the fed. The only depositors there are commercial banks and they know their deposits are covered by the printing press. So no run on the fed.
We can sleep well tonight.
The only potential impact is a very minor increase in inflationary pressure.
$114bil extra money in an economy of $27 trillion.