Central Bank garners largest profit in 96-year history
This week the Federal Reserve reported astounding profit figures for 2009. According to the latest report conducted by Reuters, the Central Bank brought in an estimated $45 billion last year thanks to the aggressive purchasing of bonds, reduction of interest rates and stimulation of growth.
The Fed is funded through it’s own operations and returns it’s profits to the treasury and 2009 marks the largest profit posting year by the Central Bank in it’s 96 years of existence. The second largest return to the treasury happened in 2007, with $34.6 billion returned.
The article stated that, “By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier.” It continued on to claim that, “interest income on the investments was a major source of Fed profits.”
This news may seem contrary to our current recollection of the Central Bank’s status given the recent purchases of such failing financial institutions as Bear Sterns and AIG (American International Group), however the recent report claimed that the Fed received $4.7 billion in interest payments from the loans made to those institutions in 2009.
January 12th, 2010 at 9:55 am
Well, when you hold all the cards and basically have the ability to loan money to yourself and create that money too, you certainly should be able to show a profit.
January 12th, 2010 at 1:17 pm
Agreed. The fed is just as bad as a drug cartel. They aren’t loaning to anyone without perfect credit scores and are providing shit for returns on savings.
January 12th, 2010 at 1:21 pm
@Hal – well said Hal! We’re still impressed that they were able to squeeze out some profit from Bear Sterns and AIG though.
@Steven – Drug cartel?? I don’t know about that one…