Can the Federal Reserve go bankrupt?

Photo by Melinda Gimpel on Unsplash

The issue of whether the Federal Reserve can go bankrupt (or become insolvent/default) is interesting. In this article, I want to give my take on the matter so that you can have a better grasp of the topic.

Technically

Technically, no, the Federal Reserve can’t default or become insolvent. Why? Because they can always create new money/credit out of thin air. However, this…