This is one example of many articles that report on the alleged profits that the Fed posted: http://thehill.com/blogs/on-the-money/banking-financial-institutions/151227-fed-turns-record-profit-in-2010 What’s the Austrian response to this? Are the numbers fudged in some crucial way? Or is the argum…

Come on, this is explained in the linked article. The Fed purchases stuff using money it creates, this stuff brings profit. To think of it, if you could pay by just writing “This is one billion dollar” on a post-it, couldn’t you make any profit you want? Just buy half of stuff available on NYSE, h…

A Mafia hit man once explained a racket he made nice money with. He would go to rich gullible friends and explain that the current loan shark rate is 10% a week [true]. He could make a lot of money if only he had a partner to give him money to lend [true]. So would Mr Upstanding Citizen please lend…

“This is exactly the situation the Fed is in. They are getting back some small amount of interest [25 billion a year on a trillion dollar investment. 2 and a half percent]. But the stuff they own, which they bought from the banks in order to bail them out, is called “toxic assets”, meaning “loans th…

“Are they just totally disregarding the amount they originally lent…” Yep. A close reading of the article shows that to be the case. The fact that someone owes them money is considered an asset in their books. I quote: The combined annual financial statements for the Federal Reserve Bank system r…

"The fact that someone owes them money is considered an asset in their books. I quote: The combined annual financial statements for the Federal Reserve Bank system revealed that it had increased its asset holdings by $193 billion in 2010, reaching a total of $2.428 trillion. The balance-sheet boos…

Alex, We could use some help from an accountant here, but I’ll tell you what I think is how things are done. I think it standard accounting procedure to consider money owed you an asset and interest paid you a profit. I also think that money owed you is an asset, but the value of this asset is no…

Just to spell things out more. Clearly mark to market is what a sane person would look at. Say you were thinking of buying a business and wanted to inspect their books before making making a decision. How would you want that loan to the homeless drug addict to show up on the books? As an asset worth…

Fed posting profits in 2010?

Economics Economics Questions

Think_Blue March 22, 2011, 2:57pm 3

[url]When the FED returns it's profits to the Treasury, what does the Treasury do with it?]

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Fed posting profits in 2010?

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