A fraudulent Federal Reserve

New York’s attorney general, Letitia James, campaigned on a “get Trump” platform, and set her sights on destroying him no matter how corrupt she had to be. Her case? Donald Trump put out a financial statement with estimated values, including footnotes to say these were estimated values, reminding banks and insurance companies not to trust them. There were no victims and no intents to mislead. There was no fraud.

Below are instances of what actual fraud looks like.

The Federal Reserve has been losing massive amounts of money since 2022 by essentially paying banks more money for their deposits than what they earn. The big banks are the biggest winners in this scheme.

Instead of showing the losses in their balance sheet, they just create a fictional asset called a deferred asset. They pretend they didn’t lose money. They did a journal entry. From Reuters last week:

U.S. Federal Reserve losses crossed the $200 billion point this week, according to data released on Thursday by the central bank.

The negative number is captured in an accounting measure the Fed calls a deferred asset. The Fed must cover this shortfall before it can begin returning excess earnings to the Treasury.

Fed losses flow from the high-interest rate monetary policy path it had been pursuing to bring down inflation.

The Fed pays banks and money funds to park cash at the central bank to keep short-term interest rates at the desired levels. The Fed tilted into loss two years ago and faced record red ink in 2023, as the money it has had to pay out to manage rates has outstripped the money it makes from the interest earned from bonds it holds.

If a company hid their losses like this from investors or a bank, they would be prosecuted, but government-affiliated entities are special. No jobs are lost either. The Federal Reserve simply pumps out more money to cover the losses , and all Americans are victims. This money is not counted as part of the deficit because they are off budget.

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