"assets totaling $4,424 billion and liabilities totaling $4,464 billion"?
To me that's a negative 40 billion of assets.
The fed will never go broke because the can create all the dollars they want.
What the consequences of that will be is anybody's guess.
You are viewing a single comment's thread from:
Good catch. It's the other way around, and I fixed the typo. Assets $4,464B and liabilities $4,424B. Equity $40B and leverage of 111x. Your answer about creating as many dollars as they want is the standard answer, and they can do so. However, dollars (Federal Reserve Notes) are liabilities on the balance sheet of the Fed and do not solve a solvency problem at the Bank itself. It can (and has) "papered over" liquidity crises in the dollar-based global financial system. That's basically why the Fed balance sheet has exploded and become so over-leveraged since 2008.
Aa long as they can mark to fantasy their assets there ain't no problemo.