Federal Reserve’s Capital Has Now Plummeted to Negative $121 Billion, and Congress Needs To Act

https://www.nysun.com ^ | 4/24/2024 | ALEX J. POLLOCK

[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.

[ckilmer]

if this were a real problem the price of gold would explode rather than slowly go upward as has recently.

[thinden]

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.

xxxxxxxxxxxxxxxxx

with this type performance, any normal bank would have been shuttered and bankrupted years ago.

[Captain Peter Blood]

Read this book by Dr. Murray Rothbard on The Fed

https://mises.org/library/book/case-against-fed

It will not surprise me at all if if Congress were to change the Fed charter and let them buy anything and everything in the market and become the market like the Bank of Japan has done for the last 30 years.

[FlyingEagle]

The MBA in me would call that a current liability.

[Bob Ireland]

***Federal Reserve’s Capital Has Now Plummeted to Negative $121 Billion, and Congress Needs To Act***

The article does not allow me to know what the Congress is supposed to do. ?? Of course asking the Congress to do anything is like asking Klaus Schwab for a $million gift.

Well, the gaming myth of the Fed for the past few years is playing out to resolution - a resolution that renders pain to the American people - whoever that is now with an ongoing massive invasion.
REPUBLIC❗

SURPRISE💥 They were ALL carpetbaggers... call them in Monaco...

[Vermont Lt]

I guess those mortgage backed securities they were buy might not have been a good idea after all?