Fed Official: We Can Just Print Money, Damn It!

In an odd post, WSJ analyzes the Fed's just released financial statements as though it were simply a bank like any other, and concludes:

It has a more risky portfolio than it’s ever had before, including $1.25 trillion in mortgage securities that could lose market value if interest rates rise, if defaults climb or if it has to sell them quickly. A 4% loss on that portfolio would equal almost all of its capital.

Coming back to reality, WSJ then notes:

Of course the Fed can print money itself. (As opposed to a bank, which depends on the backing of depositors and other creditors to fund its operations.) Thus, as a Fed official notes, on condition of anonymity, it would be able to continue operating even if its capital becomes depleted.