a source familiar with the matter on Nostr: The Fed is paying out more in bank interest than it receives on its portfolio of ...
The Fed is paying out more in bank interest than it receives on its portfolio of treasuries and mortgage-backed securities.
Rather than admit their equity position has been wiped out and they are insolvent, they re-defined the accounting standards from GAAP (generally accepted accounting principles) to FRAP (federal reserve accounting principles).
So when their equity gets wiped out instead of admitting they are broke they mark their loss as an amount they won't send to the US Treasury once they DO get some money. This amount is counted as an asset and thus as equity and thus they are "not" insolvent.
To finance bank payments they just print (or mouse-click) fiat currency, yes.
Rather than admit their equity position has been wiped out and they are insolvent, they re-defined the accounting standards from GAAP (generally accepted accounting principles) to FRAP (federal reserve accounting principles).
So when their equity gets wiped out instead of admitting they are broke they mark their loss as an amount they won't send to the US Treasury once they DO get some money. This amount is counted as an asset and thus as equity and thus they are "not" insolvent.
To finance bank payments they just print (or mouse-click) fiat currency, yes.