Brian

And so I can only imagine that Elizabeth Warren doesn't understand that we're paying private banks $200 billion a year because I think she'd have a cow if she knew that. She hates banks. And so this is the most amazing, insane policy I've ever seen. And yet we're doing it.

Well, OK, so there's two things going on here that are separate. One, in order to do quantitative easing. So Ben Bernanke, when he was fighting the financial panic of 2008, created like four trillion new dollars. Jerome Powell. and literally created out of thin air. Jerome Powell did the same thing during COVID.

Well, OK, so there's two things going on here that are separate. One, in order to do quantitative easing. So Ben Bernanke, when he was fighting the financial panic of 2008, created like four trillion new dollars. Jerome Powell. and literally created out of thin air. Jerome Powell did the same thing during COVID.

So we have created $8 trillion more of Fed balance sheet that turned into $14 trillion more of M2, which is all our checking accounts. So the Fed literally creates this money. But then once they've created it, now you have interest earned and interest expense, and the Fed is losing money based on that. Here's another way to think of this.

So we have created $8 trillion more of Fed balance sheet that turned into $14 trillion more of M2, which is all our checking accounts. So the Fed literally creates this money. But then once they've created it, now you have interest earned and interest expense, and the Fed is losing money based on that. Here's another way to think of this.

When they created $4 trillion under Bernanke and then another $4 trillion under Powell, they bought bonds to put on the Fed's balance sheet, and interest rates were super low. when they did this. So when interest rates went up, they actually lost money on their portfolio. Right now, the Federal Reserve has a trillion dollars of losses on its bond portfolio. And it's all because they bought bonds

When they created $4 trillion under Bernanke and then another $4 trillion under Powell, they bought bonds to put on the Fed's balance sheet, and interest rates were super low. when they did this. So when interest rates went up, they actually lost money on their portfolio. Right now, the Federal Reserve has a trillion dollars of losses on its bond portfolio. And it's all because they bought bonds

When interest rates were low and now interest rates have gone back up. So the Fed is caught. They they have losses on their books. They can't sell those bonds off without taking those losses. At the same time, they don't want the banks to lend out the money. So they're paying them that they created out of thin air.

When interest rates were low and now interest rates have gone back up. So the Fed is caught. They they have losses on their books. They can't sell those bonds off without taking those losses. At the same time, they don't want the banks to lend out the money. So they're paying them that they created out of thin air.

And so they're paying the banks to hold on to that cash so that it doesn't turn into inflation. But their bond. No. Yeah. Finish your thought. Go ahead. All I was saying is their bond portfolio is not earning as much as they're paying. So that's where they make a loss. And then the question is, how do they pay to keep the lights on? Do they print the money?

And so they're paying the banks to hold on to that cash so that it doesn't turn into inflation. But their bond. No. Yeah. Finish your thought. Go ahead. All I was saying is their bond portfolio is not earning as much as they're paying. So that's where they make a loss. And then the question is, how do they pay to keep the lights on? Do they print the money?

Well, it doesn't look like they're doing that. Are they taking it from the interest that they're earning from those bonds and somehow moving it into another account? Or are they just borrowing straight from the treasury? And my belief is they're borrowing straight from the Treasury, even though they won't tell us that that's exactly what they're doing.

Well, it doesn't look like they're doing that. Are they taking it from the interest that they're earning from those bonds and somehow moving it into another account? Or are they just borrowing straight from the treasury? And my belief is they're borrowing straight from the Treasury, even though they won't tell us that that's exactly what they're doing.

Yeah, no, the Federal Reserve creates a deferred asset. Like, that's the weirdest phrase I've ever heard. It's a negative number, and they promise that they're going to pay the Treasury

Yeah, no, the Federal Reserve creates a deferred asset. Like, that's the weirdest phrase I've ever heard. It's a negative number, and they promise that they're going to pay the Treasury

that money back when they start making a profit again in the future so in return for that promise uh the the treasury is now funding the fed all right and and what's interesting about this is congress did not agree to this congress did agree to let the fed pay interest to banks but they did not agree that the the fed the treasury uh could lend the fed this money

that money back when they start making a profit again in the future so in return for that promise uh the the treasury is now funding the fed all right and and what's interesting about this is congress did not agree to this congress did agree to let the fed pay interest to banks but they did not agree that the the fed the treasury uh could lend the fed this money

And so I actually think there's a lawsuit here around.

And so I actually think there's a lawsuit here around.

Well, to me, it is. And nobody focuses on it. And, you know, what's fascinating is you go in every month or every well, every time the Fed meets, it's like eight times a year. They have a press conference and there's. 30 reporters that are handpicked by the Fed to come in and no one will ask them how they're paying to keep the lights on.