Name: Federal Reserve Balance Sheet
Uploaded: 2013-11-14T05:26:23.000Z
Duration: 9 min 57 s
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I think you'll find this video exciting because until now,

Adverbs of degree

we've just been talking about the Federal reserve in the

abstract and I was drawing little boxes to represent

balance sheets, but this is the actual Federal reserve

balance sheet and I took a date that was before all of

this silliness started happening in the banking

sector just so we could kind of see what a Federal reserve

balance would've looked like in a normal environment.

And then we can actually, in future videos, compare what

they've done since then and then we can get a better

insight into all of the different machinations that

the Federal reserve has done to kind of try to keep banks

liquid and solvent and to keep everything going.

And we can debate whether they've been good or bad or

they're just keeping banks in kind of zombie mode.

But anyway, this is the Federal reserve's balance

So before all the craziness happened, although a little

bit started-- this is before the Feds started taking really

aggressive action to provide liquidity for the markets.

So first of all, we have the total assets number.

Let me draw that here in our traditional box diagram.

So if I were to draw the assets-- the sum of all the

assets over here is $871 billion, and we know that the

liabilities plus equity better add up to $871 billion.

So the liabilities-- I'll do it in a different color.

The liabilities are $840 billion, give or

They should have the same width, not that the width

And then whatever's left over should be equity, right?

What you have minus what you owe is what you're left with

And of course, owners of the Federal reserve, you kind of

They really don't have the upside of traditional owners.

They're really just kind of stakeholders.

And here we have it-- total capital is $31 billion.

So big picture, so far it's kind of meeting up with how

we've envisioned a Federal reserve balance sheet, but

let's dig a little deeper and see if we can find interesting

And hopefully at this point, we should actually

This is $11 billion of gold certificate accounts and

Let's see if they have any other gold anywhere.

I don't know what special drawing rights certificate

account is, but it's very small relative to

This is just kind of almost rounding-off error.

Actually, I think this $11 billion is actual gold because

I don't see it anywhere else on their assets.

So I think if you combine roughly-- I don't know what

this thing here is, but if you combine this and this, it's

saying that the Federal reserve is-- because I don't

see gold anywhere else here-- that it's holding roughly $12

billion worth of gold, which really isn't a lot of gold

when you consider the total size of its balance sheet.

The big piece right here-- let me pick a different color.

It has securities, repurchase agreements, and loans-- $808

So this is a big piece of the Fed's balance sheet.

So pretty much it's almost like that much of it.

Actually, maybe a little bit less of that-- are these

Let's see what kind of securities they have. And they

So this $808 billion is made up of these things right here.

The bulk of them are U.S. treasury loans, right?

So these are going to be bills, notes, and bonds-- OK.

So just to explain, a treasury bill-- and I've done videos on

this-- this is essentially a loan to the government for a