Odeon Capital Group chief financial strategist Dick Bove joined "Mornings with Maria" Tuesday, arguing that the Federal Reserve is in "deep trouble" over its balance sheet and is in one of "the worst" positions he’s ever seen.
DICK BOVE: I think that people have got to start looking at the Federal Reserve balance sheet because if the Federal Reserve was a private bank, then you looked at that balance sheet, you would say this company is insolvent. The reason why you would say that is because the Federal Reserve’s source of money -- which comes from printing, it comes from collecting money from the banks, you know, in reserves, comes from a couple of other places -- is in deep trouble.
If you would look at that balance sheet, you would realize that more than 100 percent of the increase in the Federal Reserve balance sheet, in the last 12 months, has come from borrowing money in the reverse repo market. In other words, the Fed is sitting at borrowing money at the shortest end of the curve in order to fund the purchase of long-term Treasuries. The balance sheet is a disaster.
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