Chen Hui watched George eat with relish, and slowly followed suit.

Looking at the Fed's announcement this year, the 2013 audit report released by the Federal Reserve shows that in 2013, the Fed remitted $79.6 billion to the U.S. Treasury Department, received $90.4 billion in interest from holding securities, paid $5.2 billion in interest on the reserve balance of depository institutions, and the Fed's assets totaled $4 trillion by the end of 2013, and the profits in 2013 totaled $81.4 billion

"George, the Fed's huge holdings of assets recorded a net profit of $84 billion last year, and the average return over the next 10 years is hopefully still above pre-financial crisis levels...

········· It's really fattening the Finance Bureau!"

····”

"While the Fed's open market operations report released on Thursday paints a very optimistic picture, it also points out that if the Fed were forced to "mark-to-market" its portfolios, as the law requires private companies, it would have been $53 billion in unrealized losses.

This is the first time the Fed has officially acknowledged unrealized losses. However, since it does not require the use of market present value in its accounting treatment, and it does not sell any assets, the Fed is still continuing to hand over profits to the government.

And the sheer size of the system's open market account portfolio, the large number of longer-dated bonds held by the Fed, and the low interest rates on the Fed's interest-bearing debt continue to generate high portfolio net returns, resulting in a total of $84 billion for the Fed in 2013. ”

"Last year, I remember that the Fed's net profit was $89 billion! The big buyers in the bond market in recent years are from the Fed," Chen Hui said

"Yes, the Fed's earnings in 2013 were slightly lower than the $89 billion in 12 years, when the overall bond market was still on the rise, and the unrealized results were not only not losses, but rather $215 billion in gains. But the political risk for the Fed is that if the bond market declines as expected, it will recognize a loss if it sells those bonds in the next few years. Some members of Congress may use these losses as an excuse. George said unhurriedly

Chen Hui immediately said: "The chairman of the Federal Reserve and most other officials are not going to sell these mortgage-backed bonds on their balance sheets, and they are not going to sell Treasury bonds, they must wait for these bonds to mature." ”

Yes, current portfolio and interest rate projections say that "average net returns between now and 2025 are expected to remain above pre-crisis levels, as seen in baseline and many other projections············ George said slowly.

"George, are you going to vote with me on U.S. Treasury bonds?" Chen Hui asked with a smile

"Chen, my brother, that's what I mean, but now is not the time to enter the market, and I'm not good at operations and trading. George said

"George, don't worry, when the Fed ends its monetary easing, we will find an opportunity to enter the market and leave the transaction to me!" Chen Hui said with a smile

Although the treasury bond market may not be as profitable as the foreign exchange market, but after all, it is also meat, making billions of dollars, and now it is becoming more and more difficult.

"Yes, no problem, Chen, it will depend on you to make a fortune in the future, my brother," said George, with some excitement.

The two then began to discuss the Fed's future interest rate movements.

George said vividly: "The flow of global capital determines the prosperity and bust of various places, the place where capital flows must bring prosperity, and the place where capital flows out will either be depressed or crisis." ”

Chen Hui listened slowly to George's rambling and expounded his views on the future. Every time a world-class central bank makes a big move, it means that it has begun to break the original policy, and the financial and economic turmoil is going to be turbulent, and the speculative market is even more bloody.

"The Fed is not going to shrink sharply all at once, because it will not maximize the benefits, and expectations are the most important!" George looked at Chen Hui and listened carefully before continuing

"Indeed, but it's about to start the sheep shearing period!

"Yes, because only by maintaining the expectation of monetary contraction, can the capital continue to flow in, in the previous interest rate cut meetings, if Mr. Bernanke in the interest rate cut meeting, a one-time termination of quantitative easing measures, then, the impact on the US economy and stock market is very large, and at the same time it is impossible to raise interest rates for a long time in the future, this expectation is gone, at least not for a year or two, not good for the United States.

Therefore, whether it is the exit of quantitative easing or the future interest rate hike, the Fed will evolve into a kind of drama, maintaining contraction expectations for several years, that is, in order to maintain a continuous inflow of capital, so as to maximize benefits. George analyzed it precisely.

The future policy of the Federal Reserve, as well as the trend of the world economic situation, is indeed as George said.

"George, your statement is very correct" Chen Hui gave George a thumbs up.

"In the future, the European Central Bank will also loosen money, and now the economy of the eurozone is almost unbearable, and if there is no monetary easing, they will soon have to enter the great deflation. Hey," Chen Hui said with a smile

"Yes, the economy of the eurozone is really bad now, and if you don't carry out monetary easing, you can't get out of the economic quagmire, and I haven't found that some central banks in the world will take the initiative to carry out big deflation, and printing money is the fastest, most comfortable way, and the most effective way," George said seriously

"Haha, if you want to practice magic skills, you must first go to the palace, and when the time comes, I will let the ECB fall into a situation where there is no debt to buy in the German bond market!"

In the future, the ECB will really fall into the embarrassing situation of having no debt to buy in the German bond market, but the EU's policy stipulates that it must buy!

"Haha, Chen, I find that the most hated thing is not us bankers, but you speculators! You are behind everything, and the ECB will have to buy German government bonds from you at a high price," George said with a laugh

George thought it would have to be funny, and the ECB would be embarrassed to have to spend more money, higher prices, lower yields to buy German government bonds from these speculators.

"Chen, this is no different from giving you money for nothing. When George heard Chen Hui say this, he immediately admired Chen Hui's vision.