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Source link: http://archive.mises.org/15755/ac-cent-tchu-ate-the-positive-the-new-accounting-at-the-fed/

Ac-cent-tchu-ate the Positive: The New Accounting at the Fed

February 21, 2011 by

The Federal Reserve made an obscure announcement in its weekly report. It appeared to be an inconsequential accounting change in the treatment of earnings. The change was buried in such jargon that it took weeks for the financial bloggers to fully digest what had happened — the new move made it effectively impossible for the Fed to go bankrupt! FULL ARTICLE by Robert P. Murphy


Patrick Barron February 21, 2011 at 9:47 am

Monetizing federal debt is just another way of printing money. The public seems unconcerned that our government will never be able to repay its bills, so it may be unconcerned that its central bank is insolvent. We have entered the Alice in Wonderland period of America’s decline, whereby few understand the real nature of things. But this situation will not last very long. No matter how much the treasury or the Fed manipulate the numbers, the people will know that something is amiss–persistent unemployment, a lower standard of living, and a more intrusive and coercive government are already here. America will face a stark choice–continue down the road to tyranny or drastically cut back government. The news from Madison, WI (where public workers are rioting over relatively small cuts to their lavish publish benefits package) is inconclusive.

Troy Doering February 21, 2011 at 10:19 am

Walker is up against a entrenched and over entitled mentality in Wisconsin.

Here is a link about over payed town supervisors, and the voters that took it away.

“The turnout — which town officials said was unprecedented for a special town meeting held in recent years — followed Post-Crescent reports that showed rank-and-file members of the Grand Chute board receive related pay and benefits packages averaging more than $28,000 annually.

The value of the average compensation package for supervisors in Grand Chute — the state’s most populous town with about 20,000 residents — more than tripled the pay of their peers in all other area towns. The sample includes the Town of Menasha, the state’s second most-populous town with about 17,000 residents and a tax base about two-thirds as large as Grand Chute’s.”

Tim Kern February 21, 2011 at 9:49 am

Cool. I asked my CPA to do that for my upcoming loan application filing, and he said something about how it’s not just insane, it’s probably illegal. When I told him to just use the Fed’s template, he understood… but he still wouldn’t do it. It’s crazy for everybody except the government’s special people, and I’m just not “special” enough.

J. Murray February 21, 2011 at 3:29 pm

Government accounting is its own unique field set up specifically for government, which is illegal to follow if you aren’t a government.

Mike Frick February 21, 2011 at 9:52 pm

What’s illegal for us, is meant to be illegal for government as well. If somehow it IS legal for government, that would make that government’s policy illegitimate, and therefore irrelevant. Legalized plunder is still plunder.

Seattle February 21, 2011 at 10:30 pm

Silly Mike. Rule of Law has never applied.

Mike Frick February 21, 2011 at 10:42 pm

Yeah, well, who’s fault is that, anyway?

Mike Frick February 24, 2011 at 8:05 pm

“Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame and danger that their acts would otherwise involve… But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn’t belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish that law without delay … No legal plunder; this is the principle of justice, peace, order, stability, harmony and logic.”
—Frederic Bastiat

Alex February 21, 2011 at 10:08 am

The accounting change is all window dressing and has no effect on the possibility of the Fed going bankrupt, in the sense that it can’t meet its liabilities.

First of all the effective capital of the Fed, from a bankruptcy possibility standpoint, consists of the recorded capital plus Federal Reserve notes (paper currency), since the Fed notes are not redeemable. So practical bankruptcy, as opposed to accounting bankruptcy, could not occur until the Fed’s capital account was at least as negative as the total amount of Fed Reserve notes outstanding.

Secondly, suppose that the capital account was more negative than the Fed Reserve notes outstanding and there was danger that the Fed could not meet its liabilities to the member banks’ deposits at the Fed or other miscellaneous liabilities. The government could simply grant a loan to the Fed or deliver sufficient bonds to the Fed, which the Fed could then sell to cover any shortfall. This government loan to the Fed could remain there indefinitely.

Theodore Boosalis February 21, 2011 at 10:20 am

Excellent article, Robert. I was watching this situation with anticipation, really negative in the grand scheme of things. I think the one thing missed, albeit implied, is the Fed now can just print money period. Why do I say that? The incentive to print money has increased ten-fold, if the central bank can make itself impervious to the effects of losing capital by this change.

Commenters above are correct and its great to see so much illumination in what is happening in the United States. I think what we are witnessing is the final crackup, a scenario I’ve been envisioning, turning to WWIII. All fiat currencies (or their cousins, the gold exchange standard et al) end badly. They all end in calamities as described above by Patrick, and also in mass war.

What do we do? I am struggling to understand not how things work, but what to do here. I think we’ve discussed these points to an extreme without finding ways to “fight the Fed.” I don’t see anything but war, whether it’s civil war or war “outside our borders.” I highly doubt the politicians in DC are willing to step up and ignore Wall Street Bankers threats to “fund anyone” who supports their cause- an implied threat to to not implement legislation to revoke the license they hold on money printing.

Personally, I’ve discussed these issues for years, but I cannot seem to get through to people closest to me, I can’t seem to influence people enough to say “mmm I’m going to write my congressman.” From local chambers on up, it seems people just think “things will naturally get better.” The obvious is stated above with commenters providing the shining examples that it’s not getting better – or the Fed would never have made this move in the first place. They know what’s coming, and now we’re going to essentially have to work off MORE of what they’ve caused, not less.

The brilliance of Mises et al is exactly why we need people like Ron Paul more and more. His finish at CPAC just reflects an utter incompetence of others to his cause. Why would he continue to finish higher than anyone else? Maybe that’s a good place to start, not sure.

I do know that it is all coming to an end. I am sorry, but I see no way out. I’ve tried my best on my end, discussed, cajoled, shook, listened, remarked, lobbied, you name it. Not working – so what else is there, arms?

I’ve always found agreement with Ron Paul. Maybe once there’s an exception – his idea we can win the battle intellectually. I don’t think it’s possible – I think we are witnessing the final crackup – and all the steps “necessary” by the Fed to stop their own demise. Welcome to the New World Order…

Mike Frick February 21, 2011 at 10:55 am

Perhaps THE FEDERAL RESERVE is near being irrelevant after having served its usefulness, now that a single world currency looms?

El Tonno February 21, 2011 at 11:31 am

Where exactly does this loom?

Mike Frick February 21, 2011 at 11:40 am
Theodore Boosalis February 21, 2011 at 11:47 am

Great work, Mike – glad to see the researcher hard at work. I had a discussion on this issue back in 2009 with an individual living in Maine. He wrote a book on the subject, similar to the IMF’s PR you referenced.

No doubt – in fact, there is an IMF paper I downloaded that actually discussed the Fed needing to “take a loss or losses” in the coming years prior to stimulus, ObamaCare, and QE2. The paper wasn’t an official statement by the IMF, just contributing research on what the Fed would actually have to do to avoid things like the above.

I would even argue it’s incentive now for the Fed to conduct moral hazard policy in all facets so it can bring us to the single world currency. Similar to the pro-arguments on ObamaCare’s mandatory insurance requirement, if you setup the system to do exactly what you really intend down the road, then it makes sense. Translation – setup the monetary system as a “failure across many currencies” and the argument to create one currency “makes sense.”

Interesting – the only way to make that happen is by actually incenting the system to fail.

Mike Frick February 21, 2011 at 12:06 pm

Most are taking too narrow a view, all they see are trees. To see the forest, stand farther back. There is a bigger picture, sure enough. Jefferson warned us. If the dollar is only worth 3% what it was in 1913, the year THE FEDERAL RESERVE was instituted, I’d say Thomas was correct. Central banking is also a plank of Marx’s Communist Manifesto. We’ve been had, yet we’re still discussing things that don’t matter much.

Theodore Boosalis February 21, 2011 at 12:59 pm

BRAVO MIKE! OMG – I can’t believe it’s coming out from someone other than myself – not discounting anyone here, but just educating people on that mere fact alone and all you get is macro-economic mumbo jumbo. Literally… it mumbles, and it’s jumbled…

Well done – Communist Manifesto – Exactly!

Theodore Boosalis February 21, 2011 at 11:15 am

Well played, Mike. After the last World War, that’s exactly what transpired (in principle).

Ben Ranson February 21, 2011 at 11:32 am

The implication is that the Fed can now pay any amount for anything, and Uncle Sam automatically owes them the difference between the amount payed and the market price for that thing.

For example, the Fed buys a billion dollars in Acme Perpetual Motion Company bonds. Then the directors of the Acme company squander the loot on fancy offices, political donations, big bonuses, and trips abroad. When the money is gone, Acme goes bankrupt and the price of Acme bonds falls to zero. But, hey, that’s OK! Uncle Sam now owes the Fed one billion dollars for the loss it made on the Acme bonds.

As I understand it, the Fed could now pay any amount for treasuries, say three times face value, and the government would automatically owe them the amount that they over-payed.

Mr. Kern is right. I gotta get in on this racket!

Theodore Boosalis February 21, 2011 at 11:35 am

Bingo! Very good Mike! Exactly and well stated.

Theodore Boosalis February 21, 2011 at 11:38 am

Very good Ben – exactly… In other words, unlimited inflation – this is the end to rational thought. In discussing these things with everyday people, they cannot fathom what is happening right now.

Mike Frick February 21, 2011 at 12:37 pm

You cannot see the beast that ate you, from the belly of the beast.

jferguson February 21, 2011 at 12:59 pm

The Fed doesn’t have any liabilities since Fedeal Reserve Notes and bank reserves are literally promises of nothing. The supposed liabilty owed the Treasury is nothing more than a return of interest and principal payments which came from the treasury in the first place, minus whatever the Fed chooses to use for its opertions. If Fed assets went to zero then capital would simply go to zero. Even that wouldn’t matter since the Fed can always buy more assets, without creating any liabilities, by adding new reserves to the banking system.

If you, and only you, could legally counterfeit currency would you ever be concerned about bankruptcy?

Trying to make sense of the “Alice in Wonderland” environment in which the Fed operates makes little sense.

Mike Frick February 21, 2011 at 2:02 pm

Make sense of it we must.

“I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” — Thomas Jefferson — The Debate Over The Recharter Of The Bank Bill, (1809)

“We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.” – Robert H. Hamphill, Atlanta Federal Reserve Bank

Senate Document # 43; SENATE RESOLUTION NO. 62 (Page 9, Paragraph 2) April 17, 1933: “The ultimate ownership of all property is in the State; individual so-called “ownership” is only by virtue of government, i.e. law, amounting to mere user; and use must be in accordance with law and subordinate to the necessities of the State.”

Our children are waking up homeless, so it seems.

Eric February 21, 2011 at 1:03 pm

Where’s that usual comment from Mike Sproul who always claims that FED notes are ok since they are backed by stuff the FED owns.

Now they’re backed by negative liability to the treasury as well as all the other assets it owns. Go try to redeem a $100 FED note for some negative liabilities and see where that get’s you.

Ohhh Henry February 21, 2011 at 3:26 pm

My partner just expressed concern that our heavy gold investments are “playing with fire” but whenever I hear news like the above, it just reaffirms to me that one cannot go wrong with gold unless either your physical gold is stolen (e.g. by the government) or your gold mining shares are either nationalized or hit with a windfall tax.

The Bernank reminds me of the ape-king in the animated movie The Jungle Book who tries to hold up a crumbling building but is left holding only a single stone above his head. Except a better analogy might be, instead of merely trying to hold up the edifice The Bernank is trying to hold it up while simultaneously planting dynamite in it and pressing the plunger.

Helmut Wild February 21, 2011 at 4:18 pm

Right on!
But there was another point that caught my attention:
The FEDs transfer to the Treasury the left over of profits after having paid not just their bills but also after having paid dividends.
“Paid Dividends” to whom???
Obviously to the the true owners of the FEDs, including the NY FED with its special priviledges.

My suspicion is that no matter if the FED is bankrupt or not, the true profits which are tied to the monopoly of money creation keep flowing to the real owners.
These connections require still more detailed analysis.

Alex February 21, 2011 at 4:49 pm

Lots of unnecessary gnashing of teeth here. The accounting change means absolutely nothing. The Fed could not go banrupt prior to the accounting change nor now after the accounting change. Therefore, as I said earlier, the accounting change is simply window dressing, and has no effect on any knowledgeable analyst’s opinion of likely Fed bankruptcy.

Theodore Boosalis February 21, 2011 at 5:49 pm

Sorry Alex, I understand your point, but the mechanics behind this change are very apparent. Now it’s easy to inflate, alot easier, because the bottom line is the capital account is no longer adjusted for gain or loss. So now the bankers don’t have to think about “loss”, which is a continuation of the moral hazard dilemma, and socializes the loss on the taxpayer. With rates near zero, how many losses you think are going to occur outside the capital portion of the Fed’s balance sheet? See 2007 Financial Collapse as the example. Who cares about derivatives now – why do you think the Fed is pounding their fist to get the credit line bumped and finding resistance (right now) to the idea? Because they want to back their inflation through the taxpayer as before, but not only that, they will shut off the valve and not even take a hit.

That’s the problem – their insistence they cannot shut off the valve (to deflate mercilessly but necessarily) without taking a hit. I have the IMF paper on the issue – that was printed a couple of years ago I believe, have to get it back up. They would have to take “losses” to mitigate what has happened, but they don’t want to. Now we just gave them the green light to back all of this inflation with Treasuries to be considered worthless at the point they decide to deflate, and if they don’t, then it’s unlimited inflation. Either way, it’s over!

Alex February 21, 2011 at 6:17 pm

But Theodore, without the accounting change, any potential Fed loss can be hidden by the government simply selling large amounts of new bills and bonds to the Fed, then leaving their deposit balances at the Fed intact. The interest on the new government bonds held by the Fed can always be made to exceed whatever losses the Fed might otherwise incur.

Libertarian jerry February 21, 2011 at 6:08 pm

In the end,America has a money system that is paper backing paper that buys real goods and services. We have a dishonest government backed by dishonest money that goes to buy honest goods and services for dishonest people. The problem is that the dishonest government cannot be made honest because the elites in the Political Class hold the reins of power. They have the guns,the thugs,the courts,the judges,the gulags and the various organs of government. All the people who are honest have is the truth and hope.

Robert February 21, 2011 at 6:28 pm

Paper and ink are as real as anything else. And doesn’t your weird ideology posit that a thing has value according to the value people place on it? That would seem to imply that dollars are quite valuable.

Sprachethiklich February 21, 2011 at 8:58 pm

Yeah, bro, they’re real, too. Indeed so are clouds, baby poop, and gallon jugs of lube, in case you didn’t know. See what I did there? Oh, and about that stupid ideology thing, doesn’t it hold as a central axiom that a thing has value according to the value people place on it because they have no choice due primarily to being so panglossian about government usurpation of control of the means of economic calculation? I know it says that somewhere around here if only I wasn’t congenitally dumb. I’ll go kill myself now. You’re welcome.

Mike Frick February 21, 2011 at 10:22 pm

Too funny.
Long, and straight down the middle, but too funny.

Zorg February 22, 2011 at 3:10 pm

The people didn’t place value on it, genius. It was shoved down their throats by edict.
That is the meaning of “fiat”. It is not based on voluntary exchange in the marketplace.

Can you fit that into your weird ideology?

Mike Frick February 21, 2011 at 10:19 pm

Unfortunately L. jerry, is most people don’t realize it, yet, that the government gets away with it because of the consent of the governed. All’s they need do en mass is peacefully withdraw consent.
Starve the beast.
As long as it continues to feed, it gets bigger and stronger.
Kill it.

A. Viirlaid February 21, 2011 at 7:25 pm

OK I hope I do not make anyone laugh out loud — BUT — or should that be BUTT — well if you do laugh, at least I brought something worthy to this discussion…

Yeah, I understand the article and all of the posts and have no problems with the various positions and arguments — in the end, The FED (as in “END THE FED”) did not really have to do this, it can always print all the ‘money’ it ever needs, etc.

But who gave The FED the power to change The ACCOUNTING RULES THAT IT IS SUBJECT TO?

I realize the sneakily-passed FEDERAL RESERVE ACT created The FED — and Congress theoretically can annul that act in the future.


But unless I missed it somewhere, where does THAT ACT give The FED the right to modify GAAP or whatever accounting rules it and everyone else must live by?

If I have missed it, my apologies, ‘BUTT’ I think The FED is acting illegally here and overstepping even its considerable mandate and authority.

Or am I the BUTT of a joke and I missed it???

OK everyone, starting laughing out-loud.


p.s. if an entity can change the (common) laws it is subject to (and that we all live by) is that not “Law by Mubarak” or some other dictator?
I did not know his name was Hosni Bernanke.

Alex February 22, 2011 at 10:43 am

GAAP or any other accounting rules only make sense if, when they are used, there is true economic meaning in the numbers they produce. The balance sheets of all central banks, whether directly government owned or effectively indirectly government owned, as in the case of the Fed., are phony constructs from the get go. The government bonds held on the asset side are not really assets and the liability for the currency is not really a liability. As far as the GAAP income statement is concerned, the income earned via the government bond interest is not really income. The US government pays for all operating expenses, including losses. Given this, what difference does this change in accounting make?

It will not make the Fed any more careless about its investments than it has already been prior to the accounting change. The Fed purchased a whack of toxic assets and shot up the monetary base prior to the accounting change. If they want to purchase two or three whacks more they will do so whether the accounting change is in place or not. Since the accounting change does not impact any analysis of the Fed’s actions what difference does it make?

Plus the Fed is effectively the US federal government’s bank. The operating expenses and losses are paid by the taxpayers, exactly as they would be if the US government actually owned the Fed’s equity capital. The actions of the Fed are “permitted” by the federal government, and no serious Fed moves take place without such permission. Did the Fed purchase the toxic assets and expand its balance sheet over the past two years without the Treasury’s blessings?

Mike Frick February 21, 2011 at 8:07 pm

Not laughing here.
Since the Fed., THE FEDERAL RESERVE inc. (privately held) is a lender at interest (usury), to United States federal (so-called) government, of monies it draws out of thin air (end of printing press) it is nothing more than a leach that sucks the life out of the people, who per the 14th Amendment, cannot question the public debt, as if they all agreed to it anyway.
Since it, the Fed. is in cahoots with United States (so-called) federal government, it is nothing more than a criminal enterprise maintaining perpetual debt upon the people, thus any accounting method that may be dreamed up to continue hiding the fraud is immaterial.
Ha, Ha, Hee, Hee. Ho, Ho.

A. Viirlaid February 22, 2011 at 10:24 am

Thanks Mike — I thought so.

But I am curious as to why Congress cannot summon “The Ber-Nank” up in front of the relevant committee (maybe Paul Ron’s committee) to explain why his beloved FED is not subject to the law as all the rest of us are.

For another missive against the “Bernank” please see


The above is by Paul B. Farrell at MARKETWATCH, online from Feb. 15, 2011, and is titled:

Fed dictator Bernanke needs to be toppled

Commentary: Forget Mubarak, it’s Fed reign of terror that must end

This article at MARKETWATCH has already drawn 353 mostly approving responses in the COMMENTS-section for that article.

Mike Frick February 22, 2011 at 11:21 am

I think we’d be naive to believe that Congress would seriously interrogate the Bernank, other than putting on a dog and pony show. Besides, Ben is just a front man for the Fed. anyway.
They’re (The Fed. and the Congress) in it together I’d say. I think 95 or so years of dollar devaluation (inflation) and personal income taxation is the pudding in where the truth lays. We’ve been had. It’s time to accept reality if we wish to accomplish anything positive.

Libertarian jerry February 21, 2011 at 11:29 pm

HEY ROBERT….You want paper money,fine. Give me gold and silver. Paper money ALWAYS FAILS and in the end becomes worthless. When the currency collapses it will be people like you that will be left holding the bag. A paper bag,of course.

Mike Frick February 22, 2011 at 9:35 am

“As long as mankind continue to pay “national debts,” so-called-that is, so long as they are such dupes and cowards as to pay for being cheated, plundered, enslaved, and murdered-so long there will be enough to lend the money for those purposes; and with that money a plenty of tools, called soldiers, can be hired to keep them in subjection. But when they refuse any longer to pay for being thus cheated, plundered, enslaved, and murdered, they will cease to have cheats, and usurpers, and robbers, and murderers and blood-money loan-mongers for masters.”
—Lysander Spooner, “No Treason”—

Dick Fox February 22, 2011 at 11:48 am


Doesn’t this also allow the FED to monetize its losses?

What I mean is there is a huge negative (debit) liability Owed to the Treasury. The Treasury can then sell securities to the FED and deposit the return to offset the negative liability. With the liability gone and the assets written down doesn’t the loss effectively move to cash disbursments?

Mike Frick February 22, 2011 at 12:19 pm

Seriously, can we discuss an organization that lends money that it draws out of thin air, at interest, to a government that has the power to tax the people, by the use of force if necessary, to pay said interest plus principle, as if it was legitimate?

Dick Fox February 23, 2011 at 7:13 am


Monetizing the loses from the FED’s balance sheet is important from the position of money creation. The loses on MBS and other instruments will essentially be paid for with new money. So if you default on your loan and it becomes part of the FED’s portfolio there is a high probability from this change that the loss will not be recognized as a loss to the FED but will simply be paid with new money created by the FED. This is unprecedented. It is as if a crook were to take your home, leaves it empty, and then pays your mortgage company with counterfeit money. No one wins but the mortgage company and they even lose because of the debasement of the currency.

Mike Frick February 23, 2011 at 9:56 pm

The Fed has devalued the dollar 97% since its inception in 1913. It’s not “…as if a crook were to take your home, … and then pays with counterfeit money”, they are crooks, and they do.

Mike Frick February 22, 2011 at 12:59 pm

“For this reason, whoever desires liberty, should understand these vital facts, viz.: 1. That every man who puts money into the hands of a “government” (so called), puts into its hands a sword which will be used against him, to extort more money from him, and also to keep him in subjection to its arbitrary will. 2. That those who will take his money, without his con- sent, in the first place, will use it for his further robbery and enslavement, if he presumes to resist their demands in the future. 3. That it is a perfect absurdity to suppose that any body of men would ever take a man’s money without his consent, for any such object as they profess to take it for, viz., that of protecting him; for why should they wish to protect him, if he does not wish them to do so? To suppose that they would do so, is just as absurd as it would be to suppose that they would take his money without his consent, for the purpose of buying food or clothing for him, when he did not want it. 4. If a man wants “protection,” he is competent to make his own bargains for it; and nobody has any occasion to rob him, in order to “protect” him against his will. 5. That the only security men can have for their political liberty, consists in their keeping their money in their own pockets, until they have assurances, perfectly satisfactory to themselves, that it will be used as they wish it to be used, for their benefit, and not for their injury. 6. That no government, so called, can reasonably be trusted for a moment, or reasonably be supposed to have honest purposes in view, any longer than it depends wholly upon voluntary support.”
—Lysander Spooner, “No Treason”—

J Kelly February 23, 2011 at 1:35 am

I usually have great respect for the writers at mises.org, but this article is quite misleading at a very basic level. The very balance sheet equation described in the article (assets = liabilities + equity) negates the point the author is trying to make. If liabilities ever went negative overall, capital would have to be negative as well, simply to keep the balance sheet equation in balance. Imagine a situation where the only asset was worth $100. The bank’s liabilities are $75 leaving $25 in equity. Now imagine the assets decrease in value by 80% and are marked down to $20. Under the new rules, the liabilities would then be “negative” $10. As such, in order for the equation to balance, equity would be “negative” $10. Thus, the Fed would be “bankrupt” as the author seems to understand the term (in reality, the equity would have become a deficit, which is not synonymous with bankruptcy by a long shot). Running this article by an accountant would have saved the author some embarrassment, methinks. Or am I missing something?

J Kelly February 23, 2011 at 1:46 am

Sorry, liabilities would be negative $5, and equity (deficit) negative $15, but the point remains the same.

J Kelly February 23, 2011 at 1:58 am

Ah, nevermind. Equity would be positive $25, and the embarrassment is mine. The author us right – the Fed can’t go bankrupt (or at least, into deficit)…

Mike Frick February 24, 2011 at 1:14 am

Can anyone, or any organization, go bankrupt with an unlimited money source?

Mike Frick February 24, 2011 at 1:46 am

I don’t get it.
Everyone has their eyes on a stuffed three piece suit yammering numbers, while their bank account’s (their homeland’s) being looted.

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