The Federal Reserve is MAKING Money

Always nice to see when someone is making serious money. The Fed’s balance sheet has now expanded to reach a record US$3 Trillion.

This of course begs the question how the Fed is making money? Any honest business would of course have to sell things to grow the balance sheet, or through borrowed money (debt or new equity).

The Fed doesn’t sell things, and haven’t borrowed anything, so how is it making money?

We all know it; they make it up.

How convenient that would be if I could do that. But I guess that would make me dishonest and end up in jail.

PS. Follow the link below and you will learn that “The Fed’s liabilities — which comprises mainly its lending to the financial system and most closely watched by traders — stood at $2.994 trillion on Jan. 23″. How on earth can can the Fed’s lending to the financial system end up on as a liability? If I lend money to you, it’s a liability to you but an asset to me. That’s kind of odd accounting.

Mark Chivers | Getty Images The size of the U.S. Federal Reserve’s balance sheet reached a record, Fed data released on Thursday showed, due to the central bank’s purchases of Treasurys and mortgage-backed securities that are…