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The Machine That Made America Rich Just Broke — Transcript

by Minority Mindset · 5,379 words · 786 segments · language en · Watch on YouTube

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0:00For the last 100 years, the Federal
0:01Reserve Bank was a machine that made
0:04America rich. But that machine just
0:06broke. And most people have no idea
0:09what's happening. And no, I'm not
0:10talking about a national debt. I'm not
0:12talking about the bond market. And I'm
0:14not talking about the stock market. I'll
0:16show you. The Federal Reserve Bank is
0:18the central bank in the United States.
0:20And for 109 years, it made a profit. And
0:23every single year, it would take that
0:25profit and then give it to the United
0:27States government. And then the United
0:29States government would take that money
0:30and spend it in our economy. They spend
0:33it on things like health care or our
0:35military or infrastructure. On September
0:382nd, 2026, the Federal Reserve Bank
0:40released their financial statements and
0:42they said not only did they not have a
0:44profit to give to the United States
0:45government, but they lost hundreds of
0:47billions of dollars for the first time
0:49ever. And the reason why you want to pay
0:51attention isn't because this just blew a
0:53hole in the United States national debt,
0:55which just passed $40 trillion. But this
0:58has a direct impact on the value of your
1:00dollar, your savings, and your paycheck.
1:02So in this video, I want to break down
1:04what happened, what's going on, and what
1:06this means for you and your money. That
1:08way, you can be a smarter investor.
1:10Again, this is why on September 29th,
1:11I'm hosting my live free and virtual
1:13investor workshop because the dollar is
1:15losing value. and I'm going to show you
1:17how you can profit from the dollar
1:19losing value. It's a free workshop. I'm
1:21doing it twice on September 29th. Once
1:24in the morning at 10:30 a.m. Eastern
1:25time and then again in the evening at
1:278:00 p.m. Eastern time. Yes, it is live.
1:29So, there are a limited number of people
1:31that can actually join me live. So, if
1:32you'd like to register, I have that link
1:34for you down in the description below.
1:36And when you sign up, you're also going
1:37to get added to Market Briefs, which is
1:39my newsletter for investors, completely
1:41for free as a bonus. The Federal Reserve
1:43Bank lost a record amount of money in
1:452026 after 109 years of always turning a
1:49profit and giving that profit to the
1:50United States government. And to
1:52understand what's happening, you have to
1:53understand that the Federal Reserve Bank
1:55is the central bank in the United
1:57States, but it is not federal. It says
2:00so on its website that it's not
2:01technically a part of the United States
2:03government. It's also not a reserve,
2:06meaning it's not sitting on any cash
2:07reserves. And it's also not a bank
2:10because you and I can't go there to
2:11deposit money. But what it does do, it
2:14has the ability to create money out of
2:16thin air. And this is where things
2:18really start to get interesting because
2:19if this entity can create money out of
2:21thin air, how in the world can it lose
2:23money? Let me show you. The United
2:25States government collects tax dollars
2:28from taxpayers and then they go out and
2:30they spend money on things like social
2:32security, Medicare, and our military.
2:35But the problem is is we've been
2:37spending more money than we generate
2:39from taxes. In fact, in 2025, the
2:41government spent around $7 trillion, but
2:44collected only about $5 trillion in
2:46taxes, which means the government then
2:48has to go out and borrow the rest of
2:50this money through debt. And this is
2:53where the Federal Reserve Bank comes
2:54into play because one of the strongest
2:56lenders for the United States government
2:58is the Federal Reserve Bank. Now, why
3:01would anybody lend money to the United
3:03States government or really anybody else
3:04for that matter? Because when you lend
3:07somebody else money, you get paid back
3:09interest. It's the same for the Federal
3:12Reserve Bank. And so, what the Federal
3:13Reserve Bank has been able to do is they
3:15create this money out of thin air and
3:18then they lend it to the United States
3:21government in the form of debt. Now, I'm
3:24going to grab a blue marker and show you
3:25how the Federal Reserve Bank gets paid.
3:27Now, all of a sudden, the Federal
3:28Reserve Bank has all these assets that
3:30it owns, which is the United States
3:32debt, and it gets paid back interest on
3:35that debt. And it's a pretty nice deal
3:37because now the Federal Reserve Bank is
3:39generating all this interest on money
3:40that was just created out of thin air.
3:42And if you don't believe me, just listen
3:44to what the previous chairman at the
3:45Federal Reserve Bank said on how it
3:47creates money.
3:48>> Where does it come from? Do you just
3:49print it?
3:51>> We print it digitally. So we you know we
3:53as a central bank we have the ability to
3:55create money u digitally and we do that
3:59by buying treasury bills or or bonds or
4:03other government guaranteed securities
4:04and that that actually increases the
4:06money supply. We also print actual
4:08currency and we distribute that through
4:10the Federal Reserve banks.
4:11>> But creating money and lending it to the
4:13United States government and collecting
4:14interest on that is just half of what
4:16the Federal Reserve Bank does. The
4:18second thing that the Federal Reserve
4:19Bank does is it sets interest rates.
4:22Now, I'm not talking about your mortgage
4:23rate, your car loan rate, your credit
4:25card rate, your business loan rate. I'm
4:27talking about something called the
4:29Federal Funds rate. The federal funds
4:32rate is the interest rate that banks
4:33have to pay one another when they lend
4:35each other money. So, [snorts] when you
4:36go to the bank and you deposit that
4:38$100, you're going to get paid back
4:39interest. Well, what these banks do is
4:42they're also saving their money
4:44somewhere. And the place where they save
4:46their money is the Federal Reserve Bank.
4:49Now [clears throat]
4:50this is where the Federal Reserve Bank
4:51has to pay these banks back interest.
4:53And let me draw this in red. When all
4:55these banks around the country now save
4:57their money with the Federal Reserve
4:58Bank, the Federal Reserve Bank now has
5:00to pay them back this interest which is
5:04set as the federal funds rate. So this
5:06interest rate that the Federal Reserve
5:08Bank pays back is the federal funds
5:11rate. And then the interest that the
5:12Federal Reserve Bank is collecting from
5:14the United States government is called
5:16the Treasury rate. And for more than a
5:18hundred years, the Federal Reserve Bank
5:20has been making a profit because they
5:22would create money out of thin air. They
5:25would lend it to the United States
5:26government. They would then collect
5:27interest on that money. And then the
5:29Federal Reserve Bank would then be
5:30paying interest out to these banks and
5:32then the Federal Reserve Bank would be
5:34making hundreds of billions of dollars
5:36worth of profit. They would then take
5:37that profit and then just give it to the
5:39United States government. And then when
5:41the Federal Reserve Bank gives it to the
5:42United States government, all of a
5:44sudden now they have more money to spend
5:45in the economy. Now the government can
5:47stimulate the economy. They can boost
5:49the economy. They can create more jobs.
5:51They can invest in more infrastructure
5:53because the government is essentially
5:54getting free money from the Federal
5:56Reserve Bank that's not coming from your
5:58tax dollars directly. But this system
6:00started to break in 2023 because for the
6:03first time in the Federal Reserve Bank's
6:05history, the Federal Reserve Bank lost
6:08money in 2023. And now in 2026, it is
6:12the biggest loss in the history of time
6:14for the Federal Reserve Bank as they
6:16lost hundreds of billions of dollars
6:18even though they're able to create that
6:20money out of thin air. And there's a
6:22price that you want to understand that
6:24somebody has to pay for. But first, how
6:26is it possible that the Federal Reserve
6:27Bank is losing money if they can just
6:29buy these assets, this United States
6:31debt with created money out of thin air?
6:34And the reason why is because during the
6:36pandemic time, 2020, 2021, and into
6:392022, the Federal Reserve Bank bought a
6:42lot of this United States debt. What
6:45does that mean? A lot of money was
6:47created during the pandemic. We remember
6:49the unemployment checks, the PPP checks,
6:52the stimulus checks, the grants, the
6:54trillions of dollars that the United
6:56States government was spending to keep
6:57our economy running and alive even
7:00though nobody was working. Well, that
7:02meant that the Federal Reserve Bank was
7:04printing a whole lot of money and then
7:06giving the United States that money in
7:08the form of debt. Now, yes, the Federal
7:11Reserve Bank was generating interest on
7:13that, but also remember that during the
7:15pandemic era, interest rates were at
7:17their lowest levels in the history of
7:20time. So, the Federal Reserve Bank
7:23created a whole lot of money, more money
7:25than ever before, and they bought a huge
7:27chunk of the United States debt, but
7:29they're only generating about 2% in
7:32interest on that debt. Now, here we are
7:36today, and what's happening with
7:37interest rates? Well, they're a whole
7:39lot higher. And they're a lot higher
7:42because the Federal Reserve Bank had to
7:43raise interest rates aggressively in
7:45order to fight the inflation that
7:47happened because of all this money
7:49printing. And now because the Federal
7:51Reserve Bank had had to raise interest
7:53rates, now the Federal Reserve Bank is
7:55paying out something like 4%. So they
8:00created this money and are generating 2%
8:02in interest, but they're paying out 4%.
8:05And this is why now the Federal Reserve
8:07Bank is losing hundreds of billions of
8:09dollars. Now the other interesting thing
8:11about this loss is that the Federal
8:13Reserve Bank doesn't actually call it a
8:15loss. They call it a quote deferred
8:18asset. And the reason why the Federal
8:20Reserve Bank calls it a deferred asset
8:22instead of a loss is because the Federal
8:24Reserve Bank can't actually go bankrupt
8:26because they can just print that money.
8:28When the Federal Reserve Bank loses
8:30hundreds of billions of dollars, well,
8:32they can just create more of that money,
8:34which is why they call it a deferred
8:35asset that maybe hopefully one day in
8:37the future will just make that money
8:39back. Just take a look at what the
8:41Federal Reserve Bank published. What
8:42happens when the Fed's income does not
8:44exceed its operating costs. This does
8:47not affect the Fed's ability to conduct
8:49monetary policy or meet its financial
8:51obligations. That doesn't mean that
8:53there's no consequences to the Federal
8:55Reserve Bank losing money. somebody has
8:57to pay the price. But I'll talk more
8:58about that in a minute. The Federal
8:59Reserve Bank was created in 1913 to
9:02prevent banking crisises from happening.
9:04And between 1913 to 2022, the Federal
9:07Reserve Bank was able to create money
9:10out of thin air, lend it to the United
9:12States government, and now start to
9:14generate free interest on this money
9:16because they could buy these assets, the
9:18United States Treasuries, with money
9:20that was created out of thin air. Now,
9:21the Federal Reserve Bank would then
9:23collect that interest and then pay out
9:25something called the Federal Funds rate
9:27to banks that lend money to the Federal
9:29Reserve Bank. And between 1913 to 2022,
9:32those 109 years, the Federal Reserve
9:34Bank made huge profits, hundreds of
9:37billions of dollars, oftentimes a year,
9:40just by creating this money out of thin
9:42air. And this arbitrage of lending money
9:44to the government and then paying out
9:46money to banks that broke in 2023
9:49because in 2023 for the first time in
9:51109 years the Federal Reserve Bank lost
9:54money during this system. And now here
9:56we are in 2026. The Federal Reserve Bank
9:58just published that they lost the most
10:00money ever. Hundreds of billions of
10:03dollars through this system. But they
10:04don't call it a loss. They call it a
10:05quote deferred asset because the Federal
10:08Reserve Bank can't go bankrupt. Why
10:09can't they go bankrupt? because instead
10:11of just declaring default, they just
10:13create more money, those hundreds of
10:15billions of dollars, and then they pay
10:16out that money to these banks. But there
10:18are consequences to this, starting with
10:20the United States government, because
10:22remember what I said earlier, the United
10:24States government collects money from
10:26tax dollars from taxpayers. In 2025, the
10:28government collected around $5 trillion
10:30and then they spend around $7 trillion,
10:33which means we have a deficit of about
10:36$2 trillion.
10:38And that deficit has to be funded
10:40through debt. Now, if you've been living
10:42anywhere around my YouTube channel,
10:44you've heard that the United States
10:45government now has more than $40
10:47trillion worth of national debt because
10:50we have spent $40 trillion that we don't
10:52have because the government wants to
10:54continue spending money in our economy
10:56because that keeps our economy strong at
10:59least on one side of the equation. Why?
11:01Because when the government spends
11:03money, somebody makes money. When the
11:04government signs a contract to build
11:06military equipment, companies make
11:09money, people get jobs, and things are
11:11being built. When the government signs a
11:13contract to build a new bridge or a new
11:15road, people are getting jobs,
11:16businesses are making profits. So when
11:18the government spends money, somebody
11:20else is making money, and that is a way
11:22of stimulating the economy, which is
11:23normally okay. But the problem is the
11:25government has been spending so much
11:27money that we don't have that we now
11:28have this record $40 trillion worth of
11:30national debt. And so this is where a
11:32lot of people say, "How do we fix our
11:34debt crisis?" And really, there's two
11:37things that we can do. We can cut our
11:38spending or we can raise our taxes. But
11:40cutting spending is painful because if
11:43the government were to cut back on
11:44spending, well, that means maybe they'd
11:46cut back on social security. People
11:48wouldn't like that. Maybe they have to
11:50cut back on Medicare or Medicaid. People
11:52wouldn't like that. Maybe the government
11:54has to cut back on military spending.
11:56Some people would like that, but you can
11:58imagine that, well, the government might
12:00not like that. Maybe the government
12:01would cut back on other welfare, other
12:03aid. You can start to see how cutting
12:05back government spending has a
12:07consequence because that means somebody
12:08is not making money or somebody loses a
12:11job. When Doge came in in early 2025 and
12:14they started eliminating government
12:15departments, people were losing jobs and
12:17that's what made people upset because in
12:20an effort to cut government spending,
12:22somebody had to feel some pain. So
12:24cutting government spending is difficult
12:26when you've become addicted to
12:28government spending. Well, now you could
12:30say, "Why don't we just raise taxes?
12:32That way, we can collect more tax
12:34dollars relative to our spending." But
12:36most people don't like higher taxes. Not
12:39to mention the fact that in 2025,
12:41President Trump signed the one big
12:43beautiful bill act, which is the biggest
12:45and historic tax cut bill that we have
12:47seen in about a 100 plus years. So,
12:50we're not going to be seeing higher
12:52taxes under the Trump administration.
12:54Cutting spending is not that easy. Which
12:56means now the government has just been
12:58relying more and more on debt. But
13:01there's two problems here. Problem
13:03number one that I've been talking about
13:04this entire video is for 109 years, the
13:09Federal Reserve Bank has been a source
13:11of free money for the government because
13:14the Federal Reserve Bank would make a
13:15profit through this system where they
13:17would lend money to the government and
13:18then pay out this federal funds rate and
13:20then take that profit and give it to the
13:22United States government. Like for the
13:24decade between 2011 to 2022, the United
13:29States government was paid almost a
13:31trillion,
13:32a little bit under a trillion dollars,
13:34but almost a trillion dollar of this
13:37quote unquote free money from the
13:39Federal Reserve Bank, which was extra
13:41money that the government could use to
13:43spend. But now that does not exist
13:46because when the Federal Reserve Bank
13:47lent trillions of dollars to the United
13:49States government during the pandemic
13:51and is generating 2% interest on that,
13:53that is a loss compared to how much
13:55money the Federal Reserve Bank has to
13:57pay out, which is currently around 4% in
13:59the federal funds rate to all of these
14:01banks. And so now the United States
14:04government has lost this source of
14:06revenue, but the spending hasn't
14:08decreased and the taxes haven't
14:11increased, which means the debt has to
14:14keep going up. That's one of the reasons
14:17why we now have this national debt
14:19exploding at over $40 trillion.
14:24Now, the reason why this matters is
14:27because in order to continue funding
14:28this economy,
14:30we keep going deeper and deeper into
14:32debt. Now, why does that matter? And
14:35that's going to seem like a little bit
14:36of a rhetorical question, but the reason
14:37why that matters is because the Federal
14:40Reserve Bank is not a reserve. Meaning,
14:42it's not sitting on any cash reserves.
14:44Meaning, when the Federal Reserve Bank
14:45now lends money to the United States
14:47government, that money has to be poof
14:49created out of thin air. And when the
14:52money is created out of thin air, what
14:54happens to the value of the dollar?
14:56Well, to understand that, you have to
14:58remember that our dollars are not backed
15:00by physical gold. Back in 1971, then
15:03President Richard Nixon took the United
15:05States dollar temporarily off of the
15:08gold standard.
15:08>> I have directed Secretary Connelly to
15:10suspend temporarily the convertability
15:12of the dollar into gold or other reserve
15:15assets.
15:16>> The reason why was the United States
15:18government was on the verge of default.
15:20We had a lot of expenses we had to pay
15:22as a government, but we did not have
15:24enough tax dollars coming in. And so
15:27then the government had to make a
15:28decision. Do we default on our debts or
15:31do we find an alternative solution?
15:33Because back then the United States
15:34dollar was backed by physical gold. So
15:36the government and the Federal Reserve
15:38Bank couldn't just print an unlimited
15:40amount of money. So then President
15:42Richard Nixon said, "Let's take the
15:43dollar off of the gold standard, which
15:44means now our money is just pieces of
15:46paper." And now the Federal Reserve Bank
15:48can print an unlimited amount of money
15:50and they gave a blank check to the
15:52United States government. The government
15:54then paid off all their debts and all of
15:56our financial problems were solved.
15:58Except then a new financial problem was
16:00created, inflation. In the 1970s, we saw
16:03the highest inflation that we have seen
16:05in modern history in the United States
16:07because we had printed and created all
16:09this money. So we create all this money
16:11out of thin air without creating more
16:13wealth which was physical gold then. And
16:15now the value of the dollar goes down
16:17causing the prices of things to go up. A
16:19lot of people assume that inflation is
16:21the prices of things going up. When in
16:22reality the prices of things going up is
16:24a byproduct of inflation because
16:26inflation comes from the word inflate.
16:28That's inflating the amount of money out
16:30there creating more dollars. So as the
16:32Federal Reserve Bank creates more money,
16:35the value of each individual dollar goes
16:37down causing the prices of things to go
16:39up. Again, this is why in September
16:4029th, I'm hosting my free live workshop
16:42on how you can profit from a falling
16:44dollar because of all these things
16:46happening right now. If you haven't
16:47registered for it yet, I have that link
16:49for you down in the description. But
16:50that's just the beginning. We know that
16:52the United States government is going to
16:53continue spending money that they don't
16:55have. We know that these taxes are not
16:56going to at the current rate cover the
16:59expenses. So, the government has to go
17:00deeper and deeper into debt while the
17:02government lost this revenue source from
17:05the Federal Reserve Bank. But now
17:07there's a new problem. Problem number
17:09two. So we know that this $40 trillion
17:11worth of national debt is inflationary
17:14because in order to fund all this
17:15national debt, a lot of money has to be
17:17printed. Now if we look at this side of
17:19the board, the Federal Reserve Bank is
17:21losing a record amount of money. It has
17:24been increasing its losses year after
17:26year and now we have a record 200 some
17:29billion dollars of loss by the Federal
17:32Reserve Bank. But the Federal Reserve
17:33Bank can't go bankrupt because it can
17:36just create that money out of thin air,
17:38right? It's a quote unquote deferred
17:39asset. And so when the Federal Reserve
17:41Bank loses money, what does that mean?
17:43Well, they're just going to print that
17:44money and lend it out here. That's not
17:47showing up here on the government side.
17:49That's just here on this side. Well, if
17:54we could just print an unlimited amount
17:56of money, why do you have to pay taxes
17:58in the first place? And the problem is
18:00when you just start creating that money
18:02that is inflationary. So this now
18:05becomes inflationary.
18:07This national debt becomes inflationary.
18:10And you can start to see the problems
18:11here because on one hand we have the
18:13situation where the government spending
18:15is out of control. Then on the other
18:17hand we have a situation where the
18:18Federal Reserve Bank has been printing
18:20so much money. Now we're paying the
18:22consequences for it. And the question is
18:24what is going to come next? Are we going
18:26to be able to fix this situation or are
18:28we going to see more inflation? And the
18:31way that we fix this situation, the
18:33ideal way would be to get the government
18:36spending and income in check, which
18:40essentially means the government would
18:43need its economy to grow faster than a
18:45national debt. Think of it this way. You
18:47go out and buy a half a million dollar
18:49house. If you have $400,000 of debt on
18:52the $500,000 house, you have 80% loan to
18:56value. You got a 80% mortgage. You're
18:59considered quote unquote healthy. But
19:01now, same situation. You buy the half a
19:02million house, but now instead of
19:04getting a $400,000 mortgage, you get a
19:07$600,000 mortgage. Now you're
19:09underwater.
19:11120% loan to value. That's more
19:13problematic. Today, the United States
19:16government is underwater. We have a debt
19:19to GDP ratio, a loan to value ratio of
19:23125%.
19:24Which is the highest we have seen
19:26outside of the pandemic since before
19:29World War II. And so the problem is is
19:31our national debt as an economy has been
19:34growing faster than our economy. And so
19:37if we want to fix this problem, we need
19:39our economy to grow faster than our
19:42debt. Which means either our economy has
19:44to grow faster or we have to grow our
19:46debts slower. And right now our debts
19:49are not growing slower. They keep
19:51growing faster. And we need to figure
19:53out how we can get our economy moving
19:54again. If the economy does not start
19:57growing faster than our debt, we're
19:59going to see more inflation problems.
20:01But if the economy can grow faster than
20:03the national debt, well then a lot of
20:05these debt problems can then go away.
20:08This is where the Treasury Secretary,
20:10the president, President Trump, and the
20:12entire White House believe that our
20:13economy will be able to grow faster than
20:16our national debt. Why? Because of the
20:18things like tariffs to bring more jobs
20:20to the United States. because of the new
20:21executive orders by the White House to
20:23bring more jobs to the United States,
20:25because of the investment into AI and
20:26other industries by the White House,
20:28because of the tax cuts by the White
20:30House, that that will all stimulate the
20:32economy in a way to get the economy
20:35moving to get people working to grow our
20:37productivity so our economy can grow
20:39faster than our national debt. Now, on
20:42the other side, people are concerned
20:43that well, our national debt keeps
20:45ballooning, but we're not fixing that
20:48problem. And the answer is, well, we'll
20:52see what happens. But this is what I
20:53want you to pay attention to as an
20:55investor because we're seeing these
20:57things happen. The Federal Reserve Bank
20:59was a way to make the United States
21:01government rich kind of in secret
21:02because a lot of people had no idea of
21:04how it would work, how inflation
21:06happened, how it was funding and fueling
21:09spending for the United States
21:10government. But now we're starting to
21:12see more cracks with the central bank,
21:14the Federal Reserve Bank. And my goal in
21:17this video is to help you be more
21:18educated. That way you can be a smarter
21:20investor. Investing your money is hard
21:22and on this channel I teach how you can
21:23start investing your money yourself. But
21:25for some of you working with a financial
21:27adviser, somebody who is a professional
21:29will be a better option because now it's
21:31more hands-off and you can work with a
21:33professional who will manage and invest
21:35your money for you. And that's why I
21:37partnered with my sponsor, Money Pickle.
21:39The reason why I like Money Pickle is
21:41because first they get to know you and
21:43what your needs are. And then they match
21:45you with a vetted financial advisor who
21:47would be best suited for your needs. And
21:49then they give you a free consultation
21:52call with the financial adviser. That
21:54way you can get a feel of the financial
21:55adviser and see if they're right for you
21:57or not. That way you don't have to go
21:59through a high pressure sales process
22:01with somebody who might not even be a
22:03good fit for you. If you're interested
22:05in learning more and you have over
22:06$100,000 in assets, the process is
22:09pretty simple. All you have to do is
22:10complete a short form. I have that link
22:12for you down in the description. It
22:14takes a few minutes to complete and once
22:16you do that, Money Pickle will review
22:17your answers and then pair you with a
22:19vetted financial adviser who they
22:21believe is best suited for you. It's a
22:24completely free process. That initial
22:26consultation again is free and then if
22:28you decide to move forward, then you can
22:29negotiate and discuss what your rates
22:31and terms look like with that financial
22:33adviser directly. So, if you want help
22:36managing your money and you want to work
22:38with a vetted financial adviser, my
22:40sponsor, Money Pickle, can help get you
22:42paired up with a financial adviser at no
22:44additional cost. So, if you want to
22:45learn more, I have that link for you
22:47down in the description. So, what we
22:48talked about in this video is that the
22:49Federal Reserve Bank is the central bank
22:51of the United States, but they're not
22:52federal. It's not a reserve and it's not
22:54a bank. However, the Federal Reserve
22:56Bank has the ability to do two things.
22:58Number one, it can create money out of
22:59thin air and number two, it can set
23:01interest rates. And so for 109 years,
23:04the Federal Reserve Bank was creating
23:07money out of thin air and buying assets
23:09and getting rich off of those assets.
23:11Which assets was it buying? Well, it was
23:13buying United States Treasuries, meaning
23:15it was lending money to the United
23:16States government and collecting
23:18interest on that money. And then at the
23:20same time, the Federal Reserve Bank
23:21would have expenses. Those expenses was
23:24paying interest out to banks when banks
23:26would then save their money at the
23:28Federal Reserve Bank. The interest rate
23:30that the Federal Reserve Bank paid out
23:31to these banks is called the Federal
23:33Funds rate. And the interest rate that
23:35the Fed collected from the United States
23:37government was called the Treasury rate.
23:39Well, things really started to flip
23:41during the pandemic time because during
23:42the pandemic time, the United States
23:44government had an explosion of spending.
23:47We started spending money on so many
23:48things like PPP loans and unemployment
23:50checks and grants and bailouts and all
23:51that other stuff that now the government
23:54needed a huge sum of trillions of
23:56dollars which meant the Federal Reserve
23:58Bank then printed and created those
23:59trillions of dollars out of thin air and
24:01lent it to the United States government.
24:03But also during the pandemic the Federal
24:05Reserve Bank lent it to the government
24:07when the government was only paying out
24:09about 2% in interest. So the Federal
24:11Reserve Bank locked in these loans to
24:13the government at about a 2% interest
24:15rate while at the same time after the
24:18pandemic we saw huge inflation and that
24:21inflation problem had to be fought by
24:23the Federal Reserve Bank. So how did the
24:25Federal Reserve Bank fight inflation?
24:27They started raising the federal funds
24:28rate. So now we are in a situation today
24:31where the Federal Reserve Bank is
24:32collecting 2% in interest on those
24:34trillions of dollars, but now they're
24:35paying out something like 4% in interest
24:37to the banks on these federal funds
24:39rate. Which means now the Federal
24:42Reserve Bank has begun losing money.
24:442023 was the first year in 109 years
24:48since the Federal Reserve Bank was
24:49created that the Federal Reserve Bank
24:51lost money. Today in 2026, the Federal
24:54Reserve Bank has lost more money than
24:56ever, hundreds of billions of dollars.
24:58The reason why that's a problem is
24:59number one, those billions of dollars or
25:02hundreds of billions of dollars the
25:03Federal Reserve Bank would make in
25:04profit would then be given to the
25:06Treasury and then the United States
25:07government could then spend that money
25:09in our economy to help grow our economy.
25:11But now we're in a situation where not
25:13only can the Federal Reserve Bank not
25:15give that money to the United States
25:16government, which means the government
25:18now has to borrow more money, which is
25:20more inflationary, but the Federal
25:23Reserve Bank is also losing hundreds of
25:24billions of dollars as they pay out
25:26these expenses. And the Federal Reserve
25:28Bank can't default because it just
25:30creates money. So now to cover those
25:32hundreds of billions of dollars of
25:33losses, the Federal Reserve Bank now has
25:35to print those hundreds of billions of
25:37dollars. That way they can continue
25:39lending this money out, which is also
25:41inflationary.
25:43And this is where you can start to see
25:44it becomes a very negative spiral
25:45because now this is inflationary with
25:47the Federal Reserve Bank paying out to
25:49the banks. It's inflationary that the
25:51government has to borrow more money. But
25:52we're not seeing a slowdown in spending
25:54and we're not seeing an increase in tax
25:56revenue, which is where we continue to
25:59see a lot of growth in our national
26:00debt. And the question is, are we going
26:02to see our economy outpace our national
26:04debt? And that's where hindsight is
26:072020. And as an investor, you want to
26:10understand what's happening. That way,
26:11you can find the best opportunities with
26:13your money. If you got value out of this
26:15video, the best thank you is a referral.
26:17So, if you could please share this video
26:18with a friend, family member, colleague,
26:20or fellow investor. That way we continue
26:21to spread this type of financial
26:23education. Thank you. Elon Musk and Tim
26:25Cook say that America is facing a once-
26:27in aundredyear investment opportunity
26:29that has nothing to do with the Federal
26:31Reserve Bank, has nothing to do with the
26:32dollar, and has nothing to do with oil
26:34prices that most people are overlooking.
26:36Take a look. Tim Cook in his last speech
26:38as the CEO of Apple just said that
26:41America is facing a 100year

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