Posted on 04/24/2024 8:25:48 AM PDT by bitt
Meantime the central bank seeks to palm off on the public the idea that its staggering negative capital is a ‘deferred asset.’
Hold up your hand if you think that the aggregate losses of an organization are an asset of that organization. No hands at all? Absolutely right. Losses are not an asset. That’s accounting 101. Yet the greatest central bank in the world, the Federal Reserve, insists on claiming that its continuing losses, which have accumulated to the staggering sum of $164 billion, are an accounting asset.
The Fed seeks to palm off this accounting entry as a “Deferred Asset.” Why does the Fed do this, which perhaps makes it look tricky instead of majestic? Because it does not want to report that it has lost all its $43 billion in capital and now has negative capital. The inevitable arithmetic is plain: start with the Fed’s $43 billion in capital, lose $164 billion, and the capital has inescapably become negative $121 billion.
The Fed is not pleased with this answer. In addition to its “Deferred Asset” gambit, it frequently and publicly asserts that negative capital does not matter if you are a money-printing central bank. The idea seems to be that a central bank can always print up more money. The Fed further declares that it is not in business to maximize profits. Even were all this true, it fails to change the correct capital number: negative $121 billion.
(Excerpt) Read more at nysun.com ...
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Negative 121 Billion dollars!!!! Fire up the printing presses!!
Like the Entertainment industry run by Morons
The Fed is in quite the pickle. Japan the largest holder of treasuries will be force to sell a bunch of those off to rescue its failing Yen. This while the Fed is going to need to sell a bunch of US Treasuries to finance our ever increasing debt. Between that and the Fed’s need to control inflation expect higher rates and a market collapse in the not too distant future.
They need to act, but they won’t.
Ludicrous? C’mon there is already a plaid edition of Teslas. :)
About all they could do now is print it and drive inflation through the roof. USA becomes a third world Country...the headlines!
Yeah sure…….Congress will fix it……
“They’ve gone to plad.”
Maybe they should act by going on extended leave so the country can have some time to recover from the messes they already made.
I guarantee you that 99.9% of freepers (and the public) have no idea what this “scary” number means.
What exactly is the fed reserve capital? Is it the same as assets? Does it have to do with capital reserve? What are the possible consequence of this “scary” number?
Considering the fact that the fed deals with trillions of dollars, is 160 billion even a round off error?
And can’t the fed cover this “loss” with its printing press?
LOL! Just like they’ve acted on voter fraud and illegal immigration over the years?
I can’t see how it matters. Although this is an unprecedented situation for the Federal Reserve, there is no entity which will “call their loans,” short-sell their shares, demand payment, or otherwise force them into bankruptcy.
Certainly the politicians in Washington DC need the Fed’s ability to do print money, conduct QE in all its forms, change US bank reserve requirements, etc... to monetize the massive Federal Government debt being issued.
Throw more taxpayer money at the banks...NOW!! IT IS AN EMERGENCY!!
The Federal Reserve Board should be disbanded.All they are is the noose around the neck of the working man.
Look what they have done to the value of the U.S. Dollar. It’s valueless.
We only have ourselves to blame for “too big to fail” type bailouts...
Said it was a bad idea then... still a bad idea now.
People tried to warn that the longer the inevitable collapse it put off, the more dire its effects will be.
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