Federal Reserve records massive losses, makes up fictitious value called ‘deferred assets’ to compensate
Jack Hellner

Maybe the problem with all of the government can be summarized by what the Federal Reserve is doing.

The Federal Reserve lost $114.3 billion in 2023 and doesn’t seem to care. Maybe that is why the federal government has run up $34 trillion in debt, while they pretend government programs are paid for. They don’t care. They can always print more money.

So what does the Federal Reserve do on its books when it has this massive loss? It just books a fictitious asset and fictitious equity. It cooks the books. It has no justification to claim it has money coming but does it anyway. It just assumes it will make money in the future. It certainly is not based on generally accepted accounting principles. How many other fictitious assets are on the books at the Federal Reserve or other government agencies to intentionally mislead the public? If a company were to book a fictitious asset to pretend they had more equity than they do, they would be charged with fraud. So why is the government above the law? Here’s this, from Zero Hedge:

The Fed Says Its Record Losses Don’t Matter

The Federal Reserve recently disclosed its preliminary income and expenses for 2023, revealing an unprecedented $114.3 billion in operational losses. Somewhat surprisingly, Fed officials seem unconcerned about this financial performance. Their lack of concern may be even more worrisome than the losses themselves. Like any financial institution, the Fed receives revenue from the financial assets it holds and it must pay interest on its financial liabilities. Arguably, the last round of QE played a role in setting up current Fed losses. 

One key aspect of the Federal Reserve Act is its obligation to remit its profits to the US Treasury. When the Fed experiences losses, however, it doesn’t lead to the Treasury cutting a check. Instead, the Fed issues an IOU known as ‘deferred assets,’ essentially monetizing its own deficits. Moving forward, the Fed will use future profits to offset these deferred assets before resuming regular remittances to the Treasury.

Why would we trust a government agency that is so willing to cook the books? The Federal Reserve is ostensibly supposed to monitor and control inflation but we never, or rarely, hear them talk about government policies and regulations along with out-of-control spending, which contribute massively to inflation.

When inflation started rising rapidly after Biden took office, the Federal Reserve and others falsely called it transitional.

Biden campaigned on, and has governed on, policies to intentionally destroy reasonably priced energy. As a result of these radical policies, energy prices soared, and energy inflates the cost of everything. Crude oil is used in over 6,000 products, and crude oil is still up over 90% from the day Biden was inaugurated. Yet I have not seen members of the Federal Reserve call out Biden for his energy policy as a great cause of inflation.

Biden’s green policies are forcing car companies to produce electric cars, which are losing them a massive amount of money, because the public doesn’t want them. Then the car companies jack up the price of gas-powered vehicles so they can cover the losses, and make profits to cover the cost to manufacture the more expensive E.V.s. Consumers, especially the poor and middle classes, are hit with huge increases in car payments. I haven’t heard the Fed say how thatcontributes to inflation.

Because of the increased cost of cars, car repairs and insurance rates are soaring—a “staggering 23%” increase for repair costs in just one year, and a “26%” increase for insurance rates, which equates to a $500 per year jump.>

Welfare increases also increase inflation—in 2020 a family of four received $646 in SNAP, now they get almost $1,000. Why have people on SNAP benefits received a massive increase over the past four years while the government says the cost of living adjustments for social security and disability recipients only got a total of 19.1%? The increases were 1.3%, 5.9%, 8.2%, and 3.2%.

Biden brags about how he has created 14 million jobs and that real wages are rising rapidly, so why did the number of people on food stamps only decline from 43 million in September 2020, during the pandemic, to 41.9 million in April 2023?

The government continually raises the subsidies and who is eligible for Obamacare and the result is skyrocketing health insurance costs. It did not make healthcare more affordable.

The government continually raises the subsidies for daycare and prices have skyrocketed. See below, from 2020:

In a report titled ‘The U.S. and the High Price of Child Care,’ Child Care Aware of America found that the average cost of child care in the United States ranged between $9,100 and $9,600 per year across all states and age categories. 

Now here’s this: In 2024, “the average daycare cost per week is $321,” which works out to around $16,700 per year, which is an increase of over 60% in four years. The subsidies did not make daycare more affordable. It just shifted who pays for it for some people.

Over the last 60 years the government has thrown huge amounts to colleges and it did not make education more affordable. Prices skyrocketed. Now we have a president who dictatorially and unconstitutionally wrote off the debt to buy votes. Colleges have never had the incentive to control costs. Yet, the Fed doesn’t say a word.

Biden’s open border policies have flooded America with millions of illegals, and those illegals put strains on everything, including energy, housing, food, medical, government, education, and law enforcement. That inflates demand, reduces supply, and inflates costs; yet I don’t believe the Fed has said anything about the border.

Biden’s energy policies have also de facto financed Russia and Iran, nations embroiled in war, and wars are inflationary.

Trump’s energy policies, along with reducing regulations and taxes, kept inflation low and caused real wages to rise. Russia and Iran were not as dangerous with less money. Poverty also hit a record low during Trump’s term.

The Inflation Reduction Act was falsely presented to the public. It was never going to reduce inflation and was never intended to pay for itself. It is a massive slush fund for green pushers, set to cost us nearly $800 billion.

Higher interest rates won’t cut inflation if the Biden administration continues to issue regulations that massively increase costs, especially the ones where they pretend they can control the climate.

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