Posted on 08/31/2025 10:19:28 AM PDT by E. Pluribus Unum
The Federal Reserve System has unique powers among Congressionally-chartered government bodies, and yet its powers do not include the authority to borrow money at taxpayer expense to pay for huge accumulating losses without Congressional approval. The Fed has invented its own unique financial accounting standard to disguise the fact that, under normal accounting rules, the system is deeply insolvent. From 2022 through 2025, the Fed system’s accumulated losses have completely consumed the system’s capital and forced the Fed to borrow over $185 billion more than the Fed owns in assets just to pay its bills—a fact it intentionally tries to hide from the public.
Rather than earning seigniorage profits for taxpayers, something the Fed did for more than 100 years, the present-day Fed has instead accumulated losses of the staggering amount of $231 billion. These losses reflect Fed expenses that, between 2022 and 2024, included over $420 billion paid to banks in interest on their deposits held at the Fed and over $185 billion in interest paid to other financial institutions on repurchase agreement loans; in addition, the Fed made over $4 billion in dividend payments to Fed member banks on their Fed district bank stock.
However unique, the Fed ultimately is a government agency. When it is making losses, the Fed’s annual expenses are paid by taxpayers and are a direct cost of running the government. When Fed expenses exceed Fed revenues, the Fed borrows to pay its bills. When accumulated Fed losses exceed the Fed’s capital—as they do today—the amount the Fed has borrowed in excess of the value of the Fed’s assets is a contingent taxpayer liability.
Under current accounting standards, neither Fed cash losses nor the taxpayer contingent liability created by accumulating Fed losses are reflected in the annual federal budget. This...
(Excerpt) Read more at fee.org ...
As opposed to firing the (curiously named) Board of “Governors,” how about a little jail time? I really don’t appreciate the way they abetted the Slave Party swiping 25% of everything I’ve ever saved by inflating the currency so that they could shuttle cash to enrich themselves.
So, are we screwed? Or are we screwed?
They can create money from thin air, why would they need to borrow?
After we go bankrupt and have a financial collapse people will finally realize it’s time to end the Fed.
Borrow from whom ?
If they are referring to the FED-RES, it is NOT a government agency.
First they need to understand what the Federal Reserve Bank is. The authors of this article sure don’t.
Only if we drive our value into the ground.
Only if we default.
Then why does the US Treasury get all the net earnings?
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