Brian

And so what this means is that we have increased the money supply in the United States. It was $7 trillion in 2007. It is now $21 trillion. So let me put that in perspective. If you have a $100 bill in your wallet, 67 of those dollars were created in just the last 18 years. Like, that's how much money we printed. Now, when all of that money goes into the banking system, it turns into inflation.

And the way the Fed stopped it from turning into inflation is first they raised a ton of regulations on banks. And second, they paid banks to hold that money. So we are now paying banks about $200 billion a year to not lend that money out. That means we're paying private banks. Now, the interesting thing is the Fed bought bonds with that money.

And the way the Fed stopped it from turning into inflation is first they raised a ton of regulations on banks. And second, they paid banks to hold that money. So we are now paying banks about $200 billion a year to not lend that money out. That means we're paying private banks. Now, the interesting thing is the Fed bought bonds with that money.

And so they earn interest from those bonds, but they're paying banks more than they're earning. In other words, the Fed is losing. Last year, they lost about $80 billion, and the taxpayers funded that, and we used that money to pay banks. If we stop this, think how much we could lower the deficit. Over a 10-year period, it would be $2 trillion.

And so they earn interest from those bonds, but they're paying banks more than they're earning. In other words, the Fed is losing. Last year, they lost about $80 billion, and the taxpayers funded that, and we used that money to pay banks. If we stop this, think how much we could lower the deficit. Over a 10-year period, it would be $2 trillion.

Yeah, they play sleight of hand with this, Charlie. It's crazy. The Federal Reserve has an account that they call a deferred asset. So normally, before all of this change, the Fed owned bonds, but they didn't pay banks, and they made money every year. And so then they would give that money to the Treasury at the end of the year.

Yeah, they play sleight of hand with this, Charlie. It's crazy. The Federal Reserve has an account that they call a deferred asset. So normally, before all of this change, the Fed owned bonds, but they didn't pay banks, and they made money every year. And so then they would give that money to the Treasury at the end of the year.

Now, with them losing money, they have what's called a deferred asset. which is the craziest term I've ever heard. It's a negative account. I don't know how they're paying their employees. I don't know how they're keeping their lights on because if you run a private business in a deficit, you either have to raise more equity or or debt or something in order to pay to keep the lights on.

Now, with them losing money, they have what's called a deferred asset. which is the craziest term I've ever heard. It's a negative account. I don't know how they're paying their employees. I don't know how they're keeping their lights on because if you run a private business in a deficit, you either have to raise more equity or or debt or something in order to pay to keep the lights on.

And so my belief, and the Fed won't really tell you this, is that they're borrowing money from the Treasury in order to keep the lights on. In Britain, the UK, they did the same thing. And now they're kind of caught because it's raising their deficit, but at least they're accounting for it the right way. We don't. We hide it.

And so my belief, and the Fed won't really tell you this, is that they're borrowing money from the Treasury in order to keep the lights on. In Britain, the UK, they did the same thing. And now they're kind of caught because it's raising their deficit, but at least they're accounting for it the right way. We don't. We hide it.

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.

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.