EDITOR'S NOTE: By now every American should know that any increase in the national debt is a claim on each taxpayer's future earnings and income. This should be all too obvious since the government can’t generate revenues beyond taxation. This is why money printing is also a form of taxation, but a hidden one, as it weakens the dollar’s purchasing power (as shown on the chart below) while the government reaps the benefits for fiscal purposes. According to a newly released financial statement, the Federal Reserve, as of March, is carrying roughly $330 billion in unrealized losses on its holdings of US Treasury and mortgage-backed securities. You know where we’re going with this: guess who’s responsible for absorbing those losses? It comes to show that there’s no entity that can spend and lose your current and “future” money faster than the government and the Federal Reserve.
Yikes! One of the unmentioned costs of Fed monetary tightening is the one to US taxpayers.
Fed carrying $330B in unrealized losses on its assets according to Q1 financial statement. Which US tax payers are on the hook.
Adjusting for the appreciation in its assets the Fed had seen through the end of last year, the unrealized losses were an even larger $458 billion.
This makes the Ukrainian relief bill of $30 billion look like chump change. Although it is about the same amount as Biden’s student loan forgiveness plan which would about to $321 billion.
Nobody spends other peoples’ money like politicians and now The Federal Reserve. Who are also DC-based politicians.
And yes, the purchasing power of the US Dollar and M2 Money Velocity (GDP/M2) appear to be collapsing like a dying star.
Source: Confounded Interest
Source: Confounded Interest
Originally published on Confounded Interest.
