Memo to RFK: Condemn The Fed’s $281 billion Gift to the Banks And Wall Street, Part 2

The fact that the Federal Reserve paid Member banks and Wall Street lenders to its ON/RRP facility $281 billion in interest payments last year (and likely much more in 2024) tells you that America’s central bank is flat-out shipwrecked. The very idea of paying these gargantuan bribes to the banks and Wall Street in order to force interest rates higher is just plain from wackado land.

And the same thing goes for the Fed’s cumulative profits of $871 billion over the 10-years ending in 2021 that we documented in Part 1. For crying out loud, during the same period that greatest profits generating company in the history of the world, Apple Inc., generated only $533 billion in net income. And that was on the basis of massively delivering things of value and utility to virtually the entire population of the planet.

Indeed, in 2022 alone Apple delivered:

• 232 million iPhones.

• 88 million AirPods.

• 61 million iPads.

• 26 million MacBooks.

• 88 million Apple Music Subscriptions.

• 75 million Apple TV subscriptions.

• And countless more lesser products and services.

Yet during 2013 thru 2021 the Fed’s profits were 164% of the incredible net income figures posted by Apple, and for delivering exactly what to the benefit of US producers, consumers and workers?

Well, when you look at the major metrics for the main street economy it’s hard to see a trace of any economic goodness. For example, the industrial production index is a reasonably noise free indicator because it measures activity in physical units such as tons of steel, barrels of crude oil, pounds of polyethylene etc. Also, it excludes low productivity spending and investment by the public sector which is embedded in the GDP statistics.

As it happened, while the Fed was earnings $871 billion and sending it back to the politicians on Capitol Hill as a Christmas present to off-set part of their continuous spending sprees, industrial production barely inched forward. The gains (purple area) are difficult to see without a magnifying glass because the rate of increase was a mere 0.27% per annum.