Accounting Tweak Could Save Fed From LossesSubmitted by YumYum on Wed, 01/26/2011 - 10:50
My brother is studying to be an accountant. He showed me this article. What this means is that the Fed can take their losses and shift them over to the negative "liabilities" column, which means their losses are now "assets". Their losses have now become money that is owed by the Treasury to the Fed. In other words, the American taxpayer is left holding the bag. They did this sneaky little "tweak" without any notification, or approval from our government.
From the article:
"The change essentially allows the Fed to denote losses by the various regional reserve banks that make up the Fed system as a liability to the Treasury rather than a hit to its capital. It would then simply direct future profits from Fed operations toward that liability."