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![Monetaryguy589 Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::1796677303143174144.png) Monetary McFly 🪰 [@Monetaryguy589](/creator/twitter/Monetaryguy589) on x 4572 followers
Created: 2025-07-17 04:09:51 UTC

What Backs the Fed's Money 🤔

The Federal Reserve holds Securities Assets on its Balance Sheet as collateral to backstop the physical Currency it prints and distributes throughout the world, as well as the digital Reserve Balances it apportions to the Commerical Banks

Up until 2008, the Fed's balance sheet was simple - 🟥Treasury Assets backed 🟩Currency Liabilities
 
Then we went through a period where the Currency was under collateralized - so the Fed decided to create⬛️Reserves to acquire bad assets from the Banks - providing liquidity to the interbank system, and creating the current "ample reserves" narrative

In March 09' the Fed engaged in QE1 and began to acquire🟨Agency MBS.   

Today, after several QE's and a couple of QTs, the Fed is now sitting on $4.2T of Treasuries to collateralize $2.4T of Currency and cover $1.8T of Reserve Balances - but it takes another $1.5T of Agency-MBS to fill this gap for on the Bank Reserves

![](https://pbs.twimg.com/media/GwB8GG2XUAA3DER.jpg)

XXXXX engagements

![Engagements Line Chart](https://lunarcrush.com/gi/w:600/p:tweet::1945697431276155090/c:line.svg)

**Related Topics**
[balance sheet](/topic/balance-sheet)
[federal reserve](/topic/federal-reserve)
[money](/topic/money)

[Post Link](https://x.com/Monetaryguy589/status/1945697431276155090)

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Monetaryguy589 Avatar Monetary McFly 🪰 @Monetaryguy589 on x 4572 followers Created: 2025-07-17 04:09:51 UTC

What Backs the Fed's Money 🤔

The Federal Reserve holds Securities Assets on its Balance Sheet as collateral to backstop the physical Currency it prints and distributes throughout the world, as well as the digital Reserve Balances it apportions to the Commerical Banks

Up until 2008, the Fed's balance sheet was simple - 🟥Treasury Assets backed 🟩Currency Liabilities

Then we went through a period where the Currency was under collateralized - so the Fed decided to create⬛️Reserves to acquire bad assets from the Banks - providing liquidity to the interbank system, and creating the current "ample reserves" narrative

In March 09' the Fed engaged in QE1 and began to acquire🟨Agency MBS.

Today, after several QE's and a couple of QTs, the Fed is now sitting on $4.2T of Treasuries to collateralize $2.4T of Currency and cover $1.8T of Reserve Balances - but it takes another $1.5T of Agency-MBS to fill this gap for on the Bank Reserves

XXXXX engagements

Engagements Line Chart

Related Topics balance sheet federal reserve money

Post Link

post/tweet::1945697431276155090
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