Posted on 05/08/2023 9:12:53 PM PDT by ConservativeInPA
Behind closed doors, the report is already making the rounds in expert circles: if you follow the rules of sound commercial accounting, the United States Federal Reserve (Fed) has lost its equity and is, as common language would have it, bankrupt. What happened?
During spring 2020 (i.e., in a period of extremely low interest rates), the Fed purchased large amounts of government bonds and mortgage bonds to support the economy and financial markets during the covid crisis.
The Fed paid for the purchases by issuing vast amounts of new central bank money. This has created an enormous “money surplus” in the US interbank market, where banks lend money to one another. It is exactly in this market where the interest rates for all other credit markets are determined.
(Excerpt) Read more at mises.org ...
The US has ben bankrupt for scores of years.
And they just keep spending
You can’t go bankrupt if you can print your own money.
And who's been at the wheel overseeing and directing this effing cataclysmic disaster?
Professional lawyer politicians! You know, the smart guys.
Just a little bit.
The Fed isn’t like a normal bank. It can’t be forced to sell a security my early. So it can always hold to maturity in which case it will collect all of it’s proceeds with interest and never have to recognize a loss.
The U.S. is the most financially “in the red” thing that has ever existed in recorded history.
It’s off the charts in debt.
The Fed isn’t like a normal bank. It can’t be forced to sell a security my early. So it can always hold to maturity in which case it will collect all of it’s proceeds with interest and never have to recognize a loss.
********
DannyTN,
Exactly,
I wish more people had an understanding of this, but I won’t hold my breath.
Going down an economic ‘rabbit hole’ is so much easier in the world we live in.
“FEDERAL RESERVE NOTE”
“THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE”
Any US resident owing domestic taxes, rent or a mortgage payment is therefore happy to get Federal Reserve Notes.
The federal government could eliminate federal income tax mortgage interest deductions for under 4% mortgages.
When interest rates fall, people might refinance.
.
I wonder how many taxpayers are even itemizing their deductions these days. With a combined $24,000+ standard deduction for a couple and a $10,000 cap on deductibility for state and local taxes, you’d have to be carrying a hefty mortgage and/or donating a lot of money to charity for the mortgage interest to be deductible.
Thank you for this perspective. I will rely on the stellar examples of the Weimar Republik through to Mugabe's delightful Zimbabwe for a model. Those billion dollar Z$ are now worth about five USD on EBay, proving that "you can't go bankrupt if you print your own money."
Get one today. https://www.ebay.com/b/Z-1-Billion-Zimbabwean-Paper-Money/162228/bn_73179010
Who knows? In time we might even find a "trillion dollar coin" in EBay, or some future version of the same.
Vivek Ramaswammi wants to reduce the Fed Employees by 90%.
LOL - that should make him a really popular guy if he becomes Chief Executive Officer of the Deep State!
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