Read the story here. Advertise at Before It's News here.
Profile image
By Sovereign Man (Reporter)
Contributor profile | More stories
Story Views
Last hour:
Last 24 hours:

The Federal Reserve has $910 billion in losses

% of readers think this story is Fact. Add your two cents.

The Federal Reserve– the most critically important central bank in the world– is completely, hopelessly insolvent.

This isn’t some wild conspiracy theory or overly dramatic interpretation of the facts; we’re extremely data-focused in this organization and base our conclusions on indisputable, open-source figures .

And the facts in this case are crystal clear: the Fed’s own financial statements show that their unrealized losses amount to over $910 billion. Given that the Fed only has $42 billion in capital, this means that America’s central bank has a net financial position of MINUS $868 billion on a mark-to-market basis.

To understand why, we need a quick review of how bonds work.

Most people understand pretty intuitively how investing in stocks works. Share prices fluctuate up and down every day.

Bonds are the same way. They also have prices which fluctuate day-to-day, month-to-month, and year-to-year, just like stocks.

And one of the biggest influences on bond prices is interest rates.

In fact, the cardinal rule in the bond market is that when interest rates go up, bond prices fall.

And this makes sense when you think about it. If you own a bond that pays 1%… but suddenly interest rates rise to 10%… then the market value of your 1% bond is going to fall.

After all, why would anyone buy a bond paying 1% if they can buy a brand new bond paying 10%?

Well, at the start of the pandemic, the Federal Reserve slashed interest rates to zero. And as a result, yields on US treasuries were so low they even went negative for a short time.

Banks, large corporations, and even the Fed itself bought trillions of dollars worth of bonds at these record low interest rates.

But over the past 16 months, interest rates have risen dramatically. And this means that everybody who bought bonds at record low interest rates during the pandemic is now sitting on deep unrealized losses. And that includes the Federal Reserve.

This is exactly what happened to Silicon Valley Bank several months ago.

Silicon Valley Bank had acquired more than $100 billion worth of bonds— much of that during the pandemic at record low rates. But when interest rates increased, SVB’s bond portfolio plummeted in value; they racked up huge losses and eventually went bust.

When I wrote about this several months ago, I said clearly that if SVB is insolvent, so is everyone else, including the Fed.

Now we know the truth: taking into consideration its unrealized losses, the Fed is insolvent by $868 billion. And if they keep raising rates as they did last week, the insolvency will continue to grow.

The natural question to ask is, if the Fed is insolvent, why hasn’t the financial system crashed?

Simple: the financial system is based on perception and confidence rather than reality.

And Silicon Valley Bank is instructive here yet again.

SVB went bust in March 2023. But it was insolvent as far back as late 2022. SVB was sending financial data to the FDIC and Federal Reserve back in December showing huge unrealized losses. But nobody cared.

SVB then publicly released its annual financial report to the market in January 2023; this report once again showed massive unrealized bond losses. And yet, in response, investors gobbled up SVB shares, and the stock price shot through the roof. No one cared about the insolvency.

It remained this way for months. Then, suddenly, the bank collapsed virtually overnight. It was so obvious in retrospect… and yet all the ‘experts’, including Wall Street analysts and government regulators, totally missed the warning signs.

This reminds me of the cartoons I watched when I was a kid, when Wile E. Coyote ran off a cliff, only realized when he was halfway across the canyon that he no longer had any ground underneath him.

SVB was insolvent in 2022. But like Wile E. Coyote, no one realized it until it was too late.

It’s the same thing with the Federal Reserve. They publish financial statements showing extreme unrealized losses… which grow worse with every interest rate hike. It’s so obvious.

I’ve been predicting for years that Fed would eventually engineer its own insolvency. Well now they’ve done it. Wile E. Coyote has already run off the cliff.

This doesn’t mean that Mr. Coyote will plummet to the canyon floor today, tomorrow, or even next year.

But it is very difficult to argue (though some “experts” will surely try) that the mark-to-market insolvency of the largest, most important central bank in the world is somehow a good thing.

An insolvent central bank does not make America stronger. It does not make the US economy stronger. It does not make the dollar stronger.

This is one obvious reason to consider diversifying out of the dollar, and into an asset that isn’t controlled by central banks.

And gold is one obvious candidate to consider.


Simon Black is an international investor, entrepreneur and permanent traveler. His daily letter is both educational and entertaining, and we suggest that those who want unbiased, actionable information about global opportunities sign up for Sovereign Man’s free, actionable newsletter at

From Simon Black of


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse


    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Load more ...




    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.