175 sats \ 7 replies \ @Undisciplined 26 Mar
What's the consequence of those losses?
Is that just another representation of the shrinking money supply?
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21 sats \ 4 replies \ @grayruby 26 Mar
Does the money supply shrink? To me it would just mean they are paying out more in interest on assets banks park at the Fed than they are earning on the treasuries they own. Just seems like a transfer of money from fed to banks but maybe I am missing something.
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50 sats \ 3 replies \ @Undisciplined 26 Mar
How are they sustaining those losses?
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21 sats \ 2 replies \ @grayruby 26 Mar
Not sure how the accounting or plumbing of it all works. I have heard Lyn Alden talk about it before but honestly it was many months ago so I wouldn't even know where to point you to get the answer.
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100 sats \ 1 reply \ @Undisciplined 26 Mar
I know it's all a big accounting scam, but they usually try to pretend like the assets and liabilities make sense.
I remember seeing this article back in January from AEI: https://www.aei.org/wp-content/uploads/2024/02/Fed-losses-and-monetary-policy-Jan-31_2024-WP.pdf?x91208
So, I guess they're taking these enormous losses now, while the money supply shrinks and later they'll create a ton of money to cover their losses.
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21 sats \ 0 replies \ @grayruby 26 Mar
Sounds about right.
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21 sats \ 1 reply \ @kr OP 26 Mar
good question, hope some of the econ wizards on here can give you a good answer
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21 sats \ 0 replies \ @kr OP 26 Mar freebie
more context: https://www.bloomberg.com/news/articles/2024-03-26/fed-s-operating-losses-swelled-to-record-114-3-billion-in-2023
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