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The Federal Reserve is More Profitable than Apple and Exxon Combined

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January 11, 2013 in Economics


author Joshua Wychopen

How was 2012 for your family, rolling in cash? It was a good year to be in the central banking business. Who says economic crisis isn’t good for business?

While many millions of Americans continue to financially suffer, government spending grows, new higher taxes take hold and the national debt explodes out of control, the private Federal Reserve turned a profit of $89 billion in 2012.Just to put this into perspective, the combined profits of Apple and Exxon, America’s two most profitable companies, only equal $82 billion. It was the best year for the Federal Reserve in history, ironic since this has been a very bad year for most Americans. Take a look at the Fed’s profits over recent years.

The Private Federal Reserve is More Profitable than Apple and Exxon Combined

Source of 2003-2011 data: 2011 Annual Report of the Board of Governors of the Federal Reserve System.

How was the Fed able to accomplish this? The answer is “economic crisis.” While your family has to cut back and simple items continue to increase in cost, the private Federal Reserve continues to pump the market with billions upon billions a month. As we previously reported, the Federal Reserve is pumping over $125 billion a month. The Fed’s investment portfolio, which is nearly $3 trillion, would swell to nearly $4 trillion by the end of 2013 if its bond purchase programs remain in place. Each month the Fed purchases more assets the US Dollar devalues.

And it’s not just the central banks that are seeing record profits. In the wake of the latest Quantitative Easing, QE3 and QE4, banks like Wells Fargo and other mega-banks have experienced record profits due to Fed pumping. The Federal Reserve is the largest holder of US debt.

To make a long story short, every month the private Federal Reserve buys US government bonds and mortgage backed securities, the US government pays the Fed tens of billions of dollars in interest payments, and the Fed then turns around and pays that money back to the Treasury. It’s called a ponzi scheme, but since the government does it in conjunction with private banks, it’s ok.

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