The Machine That Made America Rich Just Broke

"For the last 100 years, the Federal Reserve Bank was a machine that made America rich. But that machine just broke."

This episode breaks down why the Federal Reserve Bank posted a record loss of hundreds of billions of dollars in 2026, after 109 straight years of turning a profit and handing it to the US government. He explains how this loss adds pressure to the $40 trillion national debt and why it has a direct impact on the value of the dollar, savings, and paychecks.

Jaspreet Singh walks through how the Fed creates money out of thin air, lends it to the government, and collects interest, why pandemic era loans locked in at low rates are now costing the Fed more than they earn, and what it would take for the government to grow its way out of the problem instead of printing its way into more inflation.

In this episode, you'll learn:

How the Federal Reserve Bank creates money out of thin air, lends it to the government, and collects interest called the Treasury rate Why the Fed calls its losses a "deferred asset" instead of a loss, and why it cannot go bankrupt How pandemic era Treasury purchases locked in around 2% interest while the Fed now pays out about 4% to banks Why 2023 marked the first year in 109 years the Fed lost money, followed by a record loss in 2026 How the loss of Fed profits pushes the government to borrow more, adding to the $40 trillion national debt Why cutting government spending or raising taxes are both politically difficult paths to closing the deficit Why a 125% debt to GDP ratio means the US government is effectively underwater, like a mortgage worth more than the house Why growing the economy faster than the national debt is the path the Trump administration is counting on to avoid more inflation

Keywords: Federal Reserve, central bank losses, national debt, inflation, money printing, Treasury rate, federal funds rate, debt to GDP, dollar devaluation, investing

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