What happens if the Federal Reserve loses money?
The Fed typically earns interest income from all of the bonds it holds on its balance sheet. It also collects fees for services that it provides. Most of any Fed operating profit is remitted to the US Treasury under federal law. That money becomes part of the federal government’s operating budget. In other words, the central bank serves as a revenue source for Uncle Sam.
Americans have been laboring under the burden of inflation for well over a year. We feel the pain everywhere, from the gas pump to the grocery store. Once it became impossible to sell the “inflation is transitory” narrative any longer, the Federal Reserve began raising interest rates to fight inflation. As a result, the bubble economy is getting shaky. But even some people at the Fed seem to realize this is a fight they can’t win.
In a talk at the Ron Paul Institute, Mises Institute president Jeff Deist called inflation “state-sponsored terrorism.”
Did you know the Biden administration is still handing out COVID-19 stimulus money?
In fact, there are still billions of dollars in pandemic aid sitting in various federal and state government accounts waiting to be handed out.
Central banks’ appetite for gold remained robust in July according to the latest data compiled by the World Gold Council.
Globally, central banks added a net of 37 tons of gold to their reserves, bringing the total purchases on the year close to 300 tons.
Jerome Powell and other central bankers at the Federal Reserve are still talking tough about their inflation fight even as the economy continues to deteriorate. Peter Schiff says we’re nearing an inflection point, but the markets don’t get it yet. As he explained in his podcast, the Fed’s monetary tightening is causing a recession, but ultimately, the central bank will surrender to inflation. There is a day of reckoning ahead and we can’t avoid it much longer.
As highlighted last month, short positioning in gold was at the highest level since April 2019. This laid the seeds for a potential short squeeze. While a squeeze did unfold, it was brief. Sellers have regained control of the market and are driving the price back down.
Please note: the COTs report was published 9/2/2022 for the period ending 8/30/2022. “Managed Money” and “Hedge Funds” are used interchangeably.
According to the BLS, the economy added 315k jobs in August, which was on par with analyst estimates. While the job numbers continue to appear strong, a deeper look into the data shows some trends that may indicate weakness.
The Kansas City Federal Reserve Bank published a rather surprising paper that swerves into the truth – the Fed can’t win this inflation fight. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about the paper. He also discusses the possibility of a dollar decline and gives his first impression of the August jobs report.
Is the Federal Reserve worried about the tanking mortgage and housing market? If their holdings of mortgage-backed securities (MBS) are any indication, the answer is, yes.
The Fed has finally started shrinking its overall balance sheet as promised, but they are not shedding MBS according to plan.
The photography industry was once one of the biggest consumers of silver. With the advent of digital photography and cell phone cameras, the use of film gradually declined. But there has been a revival in film and the use of silver in photography increased last year.
This is one of several silver-related stories in the latest edition of Silver News published by the Silver Institute.