The Fed chose not to post operating losses on its income statement but instead arranged for the Treasury to absorb the losses and agreed to resume paying dividends to the Treasury when 'the arithmetic works again'—a departure from standard GAAP accounting and a form of implicit debt subordination.

factualpending

Speaker

Jim Grant

Evidence Quote

the Fed um chose not to post on its income statement but rather to uh wash away by saying that um uh the Treasury is uh absorbing them

Source

We Asked Jim Grant What War Means for InflationExcess Returns
Created: 8/12/2026, 10:39:06 PM

My Notes

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