In an unprecedented development, the Federal Reserve’s urgent crisis escalates as its decade-long bond-buying spree, valued at $7.7 trillion, reveals a shocking loss, with unrealized losses on the balance sheet surpassing $1.3 trillion for the first time ever. The amortized cost now stands at 20.4% more than the mark-to-market price, presenting an alarming financial discrepancy. This perilous situation extends beyond the central bank, with countless banks now facing imminent trillions in losses due to manipulated asset prices in the bond market. As the threat of further bank bailouts looms large, urgent concerns intensify about the stability of the financial system. It’s crucial to note that selling devalued securities may reduce the impact on the money supply, adding a layer of complexity to an already critical scenario demanding immediate attention to avert a potential crisis.
Remember all of those trillions of $$$ worth of US Treasury and mortgage bonds that the Fed has been buying from the past decade or longer, much of it between 1% to 3%?
The current amount is about $7.7 trillion. But if the Fed sold them all today they are only worth about $6.4… https://t.co/k2zXnpjBAj
— Wall Street Mav (@WallStreetMav) November 20, 2023
“It’s entirely possible that we’re in a completely fraudulent system”
— Roberto Rios (@peruvian_bull) November 20, 2023
Spoiler alert, a debt based system needs ever more bodies paying ever more taxes to fund the pyramid scheme.
The worse thing you can do is punish the young so hard that they stop making new bodies.
— Darth Powell (@VladTheInflator) November 20, 2023
Goldman on Milei victory: "his diagnosis of the country’s economic woes is accurate: the size of the government has grown too large, it spends more than it collects, and it uses the central bank to finance its shortfalls."
So… just like the US then
— zerohedge (@zerohedge) November 20, 2023