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First Federal Reserve Audit Reveals Trillions in Secret Bailouts
The first-ever audit of the U.S. Federal Reserve has revealed 16 trillion dollars in secret bank bailouts and has raised more questions about the quasi-private agency’s opaque operations.
7000 metric tons of gold bars sit in the gold vault inside the Federal Reserve Bank of New York "This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else," U.S. Senator Bernie Sanders, an Independent from Vermont, said in a statement.
The majority of loans were issues by the Federal Reserve Bank of New York (FRBNY).
"From late 2007 through mid-2010, Reserve Banks provided more than a trillion dollars… in emergency loans to the financial sector to address strains in credit markets and to avert failures of individual institutions believed to be a threat to the stability of the financial system," the audit report states.
"The scale and nature of this assistance amounted to an unprecedented expansion of the Federal Reserve System’s traditional role as lender-of-last-resort to depository institutions," according to the report.
The report notes that all the short-term, emergency loans were repaid, or are expected to be repaid.
The emergency loans included eight broad-based programs, and also provided assistance for certain individual financial institutions. The Fed provided loans to JP Morgan Chase bank to acquire Bear Stearns, a failed investment firm; provided loans to keep American International Group (AIG), a multinational insurance corporation, afloat; extended lending commitments to Bank of America and Citigroup; and purchased risky mortgage-backed securities to get them off private banks’ books.
Overall, the greatest borrowing was done by a small number of institutions. Over the three years, Citigroup borrowed a total of 2.5 trillion dollars, Morgan Stanley borrowed two trillion; Merrill Lynch, which was acquired by Bank of America, borrowed 1.9 trillion; and Bank of America borrowed 1.3 trillion.
Banks based in counties other than the U.S. also received money from the Fed, including Barclays of the United Kingdom, the Royal Bank of Scotland Group (UK), Deutsche Bank (Germany), UBS (Switzerland), Credit Suisse Group (Switzerland), Bank of Scotland (UK), BNP Paribas (France), Dexia (Belgium), Dresdner Bank (Germany), and Societe General (France).
"No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the President," Sanders wrote.
In recent days, ‘Bloomberg News’ obtained 29,346 pages of documentation from the Federal Reserve about some of these secret loans, after months of fighting in court for access to the records under the Freedom of Information Act.
Some of the financial institutions secretly receiving loans were meanwhile claiming in their public reports to have ample cash reserves, Bloomberg noted.
The Federal Reserve has neither explained how they legally justified several of the emergency loans, nor how they decided to provide assistance to certain firms but not others.
"The main problem is the lack of Congressional oversight, and the way the Fed seemed to pick winners who would be protected at any cost," Randall Wray, professor of economics at University of Missouri- Kansas City, told IPS.
"If such lending is not illegal, it should be. Our nation really did go through a liquidity crisis - a run on the short-term liabilities of financial institutions. There is only one way to stop a run: lend reserves without limit to all qualifying institutions. The Fed bumbled around before it finally sort of did that," Wray said.
"But then it turned to phase two, which was to try to resolve problems of insolvency by increasing Uncle Sam’s stake in the banksters’ fiasco. That never should have been done. You close down fraudsters, period. The Fed and FDIC (Federal Deposit Insurance Commission) should have gone into the biggest banks immediately, replaced all top management, and should have started to resolve them," Wray said.
Renewed questions about the Federal Reserve have inspired some young activists to organize grassroots protests across the U.S.
"Since its creation by the U.S. Government in 1913, the Federal Reserve has created so much new money out of thin air that it has destroyed 95 percent of the dollar’s value," Joseph Brown, a college student and one of the organizers of a recent protest of the Federal Reserve Bank of Atlanta, said.
"This hidden inflation tax benefits Wall Street and the government, but hurts the poor and those living on fixed incomes, such as senior citizens, the most," Brown said.
The U.S. Government Accountability Office (GAO) audit itself was the result of at least two years of grassroots lobbying. IPS reported in June 2009 a wide bi-partisan coalition of Members of Congress had co-sponsored legislation to audit the Federal Reserve.
The audit was ordered as an amendment by Sanders as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act - a major banking overhaul passed by President Barack Obama and the U.S. Congress in 2010.
"I think this (the first ever GAO audit) was a good start to uncovering what the Fed did so that we can begin to determine whether similar actions should ever be permitted again," Wray wrote, adding, "my preliminary answer is a resounding no."
The GAO also found existing Federal Reserve policies do not prevent significant conflicts of interest. For example, "the FRBNY’s existing restrictions on its employees’ financial interests did not specifically prohibit investments in certain non-bank institutions that received emergency assistance," the report stated.
The GAO report noted on Sep. 19, 2008, William Dudley, who is now the President of the FRBNY, was granted a waiver to let him keep investments in AIG and General Electric, while at the same time the Federal Reserve granted bailout funds to the same two companies.
"No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed," Sanders said.
The GAO is currently working on a more detailed report regarding Federal Reserve conflicts of interest, which is due on Oct. 18, 2011.
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78 Comments so far
Show AllThe weasles are certainly in charge of Toad Hall.
The Federal Reserve seems less of a bank and more of a casino.
Team Obama brags about how the US Gov. profitted from the TARP money that was repaid by the banks.
The reality is that the banks traded the TARP money (that had token conditions attached) for Fed "loans" that come with no conditions.
You mean to tell me Ron Paul was right..
Just imagine how long Ron would stay in office.
I wish each of the fifty states would get its own state bank like the one in North Dakota.
And to think that yesterday i finally watched "Inside Job".
Yes, readytotransform, "Inside Job" is indeed a very insightful, disturbing look into the reality of the global Empire's distorted so-called 'economy' --- and yet it is entertainingly educational and easy enough to understand that I plan to use it in HS economics classes this year.
BTW, this article quotes Bernie Sanders as saying, "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the President".
However, it should be totally unremarkable to anyone who understands the fact that we are living in a post-nation-state global Empire that the full resources of our former country --- financial, political, military, etc. --- are being directed by the global corporate/financial/militarist EMPIRE toward its goals, and not toward any goals of the American people.
There remains no substantial recognition that our former country (and others like U.K. Israel et al) has been captured by a disguised global corporate/financial/militarist EMPIRE, which hides behind the facade of its TWO-Party modernized "Vichy" sham of faux-democratic government ---- just as the occupying Nazi Empire hid behind the far simpler single-party "Vichy" regime.
This is why the only successful campaign strategy for the essential third 'peoples party' to create a new America is to focus all efforts on exposing the fact that our country has been captured by a disguised Empire --- just as surely as France was captured by the Nazi Empire.
No political pawn of the Empire from either of the totally 'bought and owned' Republican or Democratic Parties will ever dare to even whisper about Empire, nor can any political whore candidate, R or D, respond to the challenge that our former country is now fully controlled by a disguised global Empire!
During the sell-out, Slick Willy Clinton's campaign, the claim was, "It's the economy, stupid", but the reality that no Democrat or Republic candidate for president in 2012 can ever respond to when the American people raise the shout of a second American Revolution is, "It's the Empire, stupid!".
'Globalization' is simply the branded and polite marketing term for global EMPIRE!
This disguised global empire is the causal cancerous tumor that creates all 'symptom problems' like wars, economic oppression, massive inequality, environmental destruction, and all other 'issues' that are used to divide and distract resistance from attacking the core of the Empire.
Alan MacDonald
Sanford, Maine
Liberty & democracy
over
violent
empire
New America People's Party 2012 --- our last chance "Against Empire" [Michael Parenti]
"However, it should be totally unremarkable to anyone who understands the fact that we are living in a post-nation-state global Empire that the full resources of our former country --- financial, political, military, etc. --- are being directed by the global corporate/financial/militarist EMPIRE toward its goals, and not toward any goals of the American people."--amacd
i haven't read "inside job" yet, but have seen enough to realize our governors are just as much puppets of the EMPIRE as any other. well, statistically speaking all bubbles burst and all empires fall. this time though will be the exception, right? it'll work out because of "american exceptionalism"
Yes, as long as Americans continue to remain afflicted with terminal denial syndrome the forces of evil will continue to transfer the wealth from 99% of us to the wealthiest 1%.
hummingbird, this, the first truly global Empire of the post-nation-state world, will not go quietly into the night:
http://www.opednews.com/articles/-Empire-Elitism-External-by-Alan-MacDonald-090310-224.html
Best,
Alan
thanks! i enjoyed, (if that word applies to this situation), an excellent well-written and informative article. i'm a pacifist, born to it i guess; but like my moniker, a fierce advocate for self defense. once i wondered just how the dupont brothers talked folk in to that fist war to end all war. the ottoman empire had pretty well imploded and england was all set to make a stance against germany, but on a whim marched into baghdad for the oil.
"never understanding that all ‘empire is evil’, including the one remaining ruling-elite ‘corporate financial Empire’-"--Alan MacDonald
as i mentioned, i liked your op/ed i copied the above, because i once asked my father-in-law, a former history teacher, "why study history?" i guess sensing a trap, he didn't pop back with the "pat" answer. while he hemmed and hawed my mother-in-law took up the slack, "so we can predict the future." too bad the "elite" shall never see that. i keep a history file about economy and capitalist corporations.
From Wikipedia, the free encyclopedia
Jump to: navigation, search
This article is about the 17th-19th century English trading company. For other uses, see East India Company (disambiguation).
The Company long held a privileged position in relation to the British Government. As a result, it was frequently granted special rights and privileges, including trade monopolies and exemptions. These caused resentment among its competitors, who saw unfair advantage in the Company's position. Despite this resentment, the Company remained a powerful force for over 250 years.
(see topic addressed)
Foundation
Foothold in India
Forming a complete monopoly
Forming a complete monopoly (excerpt)
The prosperity that the officers of the company enjoyed allowed them to return to Britain and establish sprawling estates and businesses, and to obtain political power. The Company developed a lobby in the English parliament. Under pressure from ambitious tradesmen and former associates of the Company (pejoratively termed Interlopers by the Company), who wanted to establish private trading firms in India, a deregulating act was passed in 1694. This allowed any English firm to trade with India, unless specifically prohibited by act of parliament, thereby annulling the charter that had been in force for almost 100 years. [...]
East India Company responsibilities
Fault for the famine occurred due to the British East India Company's policies in Bengal.
As a trading body, the first remit of the company was to maximise its profits and with taxation rights the profits to be obtained from Bengal came from land tax as well as trade tariffs. As lands came under company control, the land tax was typically raised fivefold what it had been – from 10% to up to 50% of the value of the agricultural produce.[7] In the first years of the rule of the British East India Company, the total land tax income was doubled and most of this revenue flowed out of the country.
The Opium Wars, also known as the Anglo-Chinese Wars, divided into the First Opium War from 1839 to 1842 and the Second Opium War from 1856 to 1860, were the climax of disputes over trade and diplomatic relations between China under the Qing Dynasty and the British Empire. After the inauguration of the Canton System in 1756, which restricted trade to one port and did not allow foreign entrance to China, the "British East India Company"faced a trade imbalance in favor of China and invested heavily in opium production to redress the balance. British and United States merchants brought opium from the British East India Company's factories in Patna and Benares,[1] in the "Indian state of Bengal", to the coast of China, where they sold it to Chinese smugglers who distributed the drug in defiance of Chinese laws.
Two books I highly recommend reading are "All The Devils Are Here", & "In Fed We Trust." Oh yes, also "End the Fed" for a satisfying conclusion.
"...and purchased risky mortgage-backed securities to get them off private banks’ books."And we can all sleep more secure in our beds tonight knowing that those pesky risky mortgage-backed securities are off the private banks' books and safely tucked away in our Fed, where they ought to be.(The next bubble, I propose the Fed buy all the too-complicated-to-explain derivatives directly from the originating banks. Just give the bankers the money and cut out the middle-man. After all, efficiency in the system is what we're looking for...no?)
" " Silence by the duopolistic political parties.
Secret loans, cheap loans, and bailouts to "risky" leveraged financial institutions using taxpayer money; and these financial insitutions turn around and charge taxpayers interest rates from 5-20% and foreclose on taxpayers homes. The current elected government, full of millionaires by the way, serves first to protect the rich and further special interest causes, then gives the crumbs to the public. How long before we become a full-fledged Banana Republic?
If this is how bad it's already showing, I can't blame the people who are calling for doing away with the FED Reserve altogether.
“The report notes that all the short-term, emergency loans were repaid, or are expected to be repaid.” Repaid to whom; the Fed? What about all of the homeowners who home values went down but their mortgage payments went up? If all of that money had been given to homeowners to pay off their mortgages then the banksters would have still received oodles of money and their assets would have no longer been toxic. Americans recognized this when they contacted their ‘elected’ representatives and implored them NOT to vote for the bank bailout by a margin of more than 100 to 1. If this didn’t prove beyond a shadow of a doubt that we no longer have a government that represents the people then you (I’m not naming anyone specifically) are incapable in many respects that a con man would find quite attractive.
I almost forgot – we do have a con man that took advantage of our desire for ‘hope’ and ‘change’. What a coincidence.
Millions of families suffered the loss of jobs and homes while the bank criminals were rewarded. If this is not brought to justice, it will eventually spark a bloody revolution, one that cannot be won by a few powerful elites. Politicians who protect the elites risk the ire of the people as well. The American tipping point is rapidly approaching. Just like hunting Nazi's, these criminals will ultimately be brought to justice even if only one at a time. Time's nearly up.
"You're on your own." OK, so I'll need to become a better farmer.
I question Stone's statement predicting "a bloody revolution that cannot be won by a few powerful elites." I think the propaganda machine is already on autopilot, and the surveillance state can quickly snuff groups of locals. The next 9/11 type event on US soil will perhaps give Martial law the green light, so they can just drive a bus around & pick up us CD-ers and put us in concentration camps. The elites will be fearless behind their golden razor-bladed walls and gated communities. Looting in cities will start, accompanied by violence, and major class warfare might develop, but it's doubtful that any change will happen to the corrupt system. As people get poorer, there will be more razor wire, that's it.
"pick up us CD-ers and put us in concentration camps."
The powers to be will avoid going that far since they wouldn't wanna wake us up or organize. We'll be perfectly "safe" right here where they want us as long as we're divided and fail to use progressive forums to unite and organize.
If you have the time, why don't you write CD's owners and editors and propose that some portion of their site be allocated for their readership to use for political organization purposes?
that's an excellent suggestion, metal! we need small workshops where us regular folks can share information and ideas. on various forums i read lots of ideas about what legislation our congressional "leaders" should enact to protect us. "tax the rich!" and "give us jobs!" just the other day a friend told me that she'll give obama one more chance and "IF things don't improve, i'll never vote again!" how many times do we need to be hit over the head with a 2" by 4" before some sense gets knocked into our collective skull?
"Think about it: partaking through fed bank stock ownership in ruling the economy, but not needing to worry personally about how the economy develops"--2 B Smarter
that bit o' wisdom applies equally to d.c.(damned corrupt) self-promoters who set policies for which none bear the negative repercussions. the system serves them well as long as they never forget who brought them to the dance. i trust them to make every effort to secure themselves so? shouldn't we?
I thought that the forums themselves were good enough for organization itself but that it was just a matter of being able to better communicate and expand on populist left. Sigh, you might be right and I'll see what to write them. Thanks for the advice.
I wouldn't want to be that bus driver...Too many good shots out there with sniper rifles...
Also, look at Afghanistan..The MIC has been using every state of the art, high tech. surveillance, highly trained mercenaries and elite Special Forces, Fighter Jets, Tanks etc. and somehow these resilient people have held their own. They did the same with the Russians and the Viet Cong did the same in that war,,,,Determined people with their life, Liberty and Freedom on the line have proven time and again to be worthy adversaries...
Read or re-read:
The Iron Heel, and People of the Abyss, Jack London
It Can't Happen Here, Sinclair Lewis
1984, George Orwell
Berlin Diary, and The Rise and Fall of the Third Reich, William Shirer
Defying Hitler, Sebastian Happner
That's just a start, but will give you some historical perspective as to what is happening and an idea of what may well be happening in the future.
I have become numb to the predatory behavior of the ruling elite.
Got anything new?
Not in this lifetime.
This is new. Work to end the elite. Be awake and vigilant!
I prefer to be drunk and astigmatic.
The bailouts were nothing more than a government-subsidized and -protected process of monopolization. Screw the Anti-Trust Laws and screw the American People!
And when the Fed delivers the bull$hit that inflation is at 2%, keep in mind that in November 2001 gold was $271. per ounce and crude oil was $18. per barrel. It's just a matter of time before the house cards comes tumbling down.
I heard gold briefly topped $1900 an ounce recently. It was $35 an ounce when Nixon took us off the gold standard in 1971. Imagine that: Gold for $35 an ounce.
Iv'e caught myself eyeballing my wife's collection of gold nugget jewelry, which I dug out of caves and stream beds in the Brooks Range of Alaska in my younger years...
Damn tempting to go back there with the price of gold over $1800.00 oz.
One of the first old timers that prospected that stream in the 20's pulled A 72 oz. pan out in one fell swoop..Like Oil though, all of the easy pickins are gone....
Gail, when the house of cards comes tumbling down, billions world wide will die. That's in actuality the reason for this whole charade. It's all part of the plan which will culminate in the biggest mass murder in history.
Mark my words.
MEL
Ah Ha! So a few of the Money Power's ploys were revealed. Big opps by IPS; Obama didn't "pass the bill:" Congress did. I would hope in the circumstances that concerned folks would go to the following link and find out what Ron Paul is doing as he's the Chair of the House committee charged with FED oversight, http://www.wnd.com/?pageId=256181 A Paul quote:
"Congress is starting to learn, but I think the people are always ahead of Congress ... Remember, it wasn't the leadership of Congress that went out and stirred up the grassroots movement, it was the grassroots movement – the people – that got excited and said this is what we want [to audit the FED]."
And this link shows you one of his campaign T-Shirts: "We Must End The Vicious Cycle of Vilolence." http://www.zazzle.com/violence_t_shirt_male-235971035882379597
Ron Paul's anti-war and anti-Fed views are swell, but he's also a supporter of the John Birch Society and the Christrian Reconstructionist movement. His civil libertarianism conflicts directly with his opposition to a woman's right to choose whether or not to have an abortion, and he is still proud that he was against the 1964 Civil Rights Act.
Be careful what you wish for.
metal--I stayed pretty much out of the Ron Paul debate on another thread but something was missing there. At the present we are talking about primaries and there would be nothing more powerful than a huge showing for Ron Paul based on End the Empire and cut the banksters off at the knees as well as restoration of civil liberties.
As for the general election, the odds of him winning the nomination and the presidency are slim to none. Do you not think a 76 yr old man who rides his bike to work everyday couldn't have an "accidental" but deadly brush with a car? The same, of course, could be said of Ralph Nader if he had an opportunity to be a serious threat to power.
Personally i believe the 2008 New Republic article was a hit piece and if Ron Paul is guilty of anything there it is delegating without monitoring. That, actually is one of my main concerns if he actually made it to the white house--that he would be a Carter in terms of management skills and too much would be delegated to people who may not be trustworthy. But, that's an argument for the general election.
I can't tell you what to think but can tell you what I think. I think that we are on a precipice and if we don't start triaging our needs we will squabble ourselves to death. We have been dumbed down, tricked out, infantalized and bled dry. People will not deal well with adversity and those long built FEMA camps will be used. The only person in the political circle talking about ways to avoid this is Ron Paul. His financial predictions have been right for this entire decade. People also say Paul is racist because he would not vote for a Congressonal Medal of Freedom for Rosa Parks. But he also refused to vote for one for Ronald Reagan. He believes they're a waste of taxpayer money and not in the Constitution. I may not like many of his ideas, especially states being able to outlaw abortion, but have triaged war, civil liberties and the banksters to be at the top of my list even before Ron Paul declared in 2007. Additionally, there is ending the drug war--he has declared intent to pardon all federal non-violent drug offenders, and health freedom which I believe is the only route to cost-effective health care. Many things he'd like to end can';t be done without Congress. Personally I don't care as much what politicians believe, I care how they act, or want to act, on those beliefs.
Read his own words: The article is entitled "My Freedom Presidency" www.lewrockwell.com/paul/paul647.html There is an archive link at the bottom of the article and there are dozens of articles that he has written or spoken on the floor of the House..
This is just theft.
The monetary system, world currency of US dollars and all that, depends on growth to pay back bank interest. Growth in GDP, which measures roughly the rate of natural resources consumption, energy and material throughput, and carbon emissions, is stagnating. Resources are getting scarce, then prices are rising. On the other hand, labor costs are becoming cheaper, with lots of desperate laid off workers to choose from. Also this reduces consumer demand, so resource prices can fall again. Until resource scarcity increases again, to put pressure on production costs. Corporations lay off more workers. Its a full and depleting world. GDP is stationary for now, but it may soon start to show real declines. More materials and energy will be used recovering from climate impacts. The cyclic decline can be slowed by resource substitution. Only where entire life cycles of energy and materials are sustainable through renewable energy and material recycling, will there be reduced pressure to decline.
"First Federal Reserve Audit Reveals Trillions in Secret Bailouts"
Did you know there's a US group of a few thousand (round est. 10,000) Federal Reserve Bank stock-holders who receive a guaranteed (by the 1913 Fed Reserve Bank Act) 6 % annual return on their stock in the Fed, amounting to a subsidy of this small, self-chosen group of some 3 billion USD 2010?
Look it up at Wikipedia, "Federal Reserve System":
"The U.S. Government receives all of the system's annual profits, after a statutory dividend of 6% on member banks' capital investment is paid, and an account surplus is maintained. In 2010, the Federal Reserve made a profit of $82 billion and transferred $ 79 billion to the U.S. Treasury."
I.e. $ 3 bn ($ 82 bn - $ 79 bn) divided among est. 10,000 fed-bank stockholders (8,000 banks owning Fed stocks, many with one dominant owner), equals an average of $ 300,000 each annually. And while not outrageous, it's still a nice, secure pension, don't you think? ( - I could survive on that...)
Add that other "fringe-benefits" of owning this stock includes being among the most economically influential people in the world, plus having access to those social circles: it means being pretty well cared for, not? - That's a pretty good return for owning some bank stock, these days...
Think about it: parttaking through fed bank stock ownership in ruling the economy, but not needing to worry personally about how the economy develops, due to the safeness of that annual dividend - which arises from people of the world simply using dollars - is that a healthy system?
And the only one, almost, asking hard questions about it is Ron Paul. Isn't that a good thing, deserving some support?
Exactly where that "statutory dividend of 6 %" amounting to 3 billion a year end up, may seem insignificant in the wash of trillions being in the headlines these days. But like an unevenness at the axel of a wheel causing the wheel to wobble and eventually break, exactly who receives and lives off those 3 bn as a sinecure may be crucial to the running of the world: it's likely that from these people (a loosely connected, yet intrinsically colluding, group of 10 - 20,000 individuals) emanate control of banks, think tanks, foundations, universities, business boards etc.
It seems that what goes on at the hub of this wheel - to continue the metaphor - should be of great interest to all of US, as the world seems to wobble increasingly.
What you and John Bircher/Christian Reconstructionist whacko Ron Paul are griping about is one of the LEAST of the Fed's legally dubious ventures. Bailing out foreign banks without any oversight or Congressional or Executive Branch permission smells of back-room dirty deals with EU bankers and economic treason to me. All of its quantitative easing policies since '09 are attritive of the general Welfare of the American people and act as back door speculatory tax on oil and food.
Its multi-trillion dollar bailout of the FOREX market isn't even explained in this rather poorly informed, inarticulate article. Its crony list of multinational non-bank corporations who received mega-handouts also deserves Congressional scrutiny and would've gotten it in the era of the Pecora Hearings.
The author of this dumbed-down article is a pwogwessive trust fund baby with no journalistic educational credentials who set himself up with an online news service naming himself "editor" and relying on volunteer journalists to work for him for free. Sort of a cross between a Boomer white male version of Arianna Huffington and Rachel Maddow who chummed himself a connection inside IPS--who really should be more careful who they allow such access.
You write one then. I'd love to read it, I am sure many here would also. I am seriously interested in reading what you have to say.
So when did the original posting become about Ron Paul??- It wasn't.
Exactly the perception that the steady subsidy of a small, influential group is "one of the LEAST of the Fed's legally dubious ventures." - which it may be in absolute numbers of dollars - could be why the significance is a lot bigger and worth looking at closer. This quietly entrenched group - not grossly exploiting, only steadily profiting - may be like the director of an economic symphony, or cacophony, where the played instruments are what is heard from.
2 B Smarter,
I believe the worst outrage of the Fed is its control of "all debts, private and public" with their funny money. IF the legal tender law was modified so we could DEMAND payment in something besides federal reserve notes, the continuous thievery from inflation and fractional reserve banking would stop.
The key to Fed power is the legal tender law. If the Fed was ended and fractional reserve banking continued at some other banking group of crooks along with money printing, NOTHING would change for us because we would still be forced to accept a currency for our goods and services (Legal tender law).
The crooks in government won't touch the legal tender law because it guarantees elite swag at our expense.
I would suggest that people look through history and at the election of some of the worlds most destructive leaders to high office.
Many of them, if not the majority,had ideas that any person would conclude were "Good Ideas". See as example the construction of the Autobahns in Germany.
When voting for one of these leaders however, one must take the whole package. Electing Ron Paul will get far more then just "disbanding the fed". He is an advocate of property rights and the rights of Capital and wishes to ensure that the already obscenely wealthy have their wealth protected and would hardly be a champion of the environment as be proceeds to dismantle virtualy every regulatory agency.
The very nature of a Ron Paul Presidency would make it very hard for a country to "Go back" once they find the Policies implemented do more harm then good. As example shifting environmental regulations from the Federal Government to the state would see States raise towards the bottom as far as those protections are concerned in order to draw investment dollars from other States. (See Boeing as example trying to shift production of Aircraft to non union states).
My own outsiders opinion is that a Ron Paul Presidency ,while certainly having many good ideas, would be a disaster for the peoples of the United States of America and for the wolrds environment and, like others here, I suggest those promoting him as President should not just focus on the ideas they like and should consider the whole package..
The idea of Ron Paul becoming President makes my skin crawl...In the first place, Mr. Paul or no other wanna-be President will ever do away with the Federal Reserve, he/she/they will more than likely be working behind the scenes for the FED, as Obama is..The Rothschild Family will simply eliminate them as they have done to so many others throughout history...And that freaky Tea-Bag Kid of his "Rand", should remind us all that the tree does not stand too far from the apple!!!
Does this mean that when the money is paid back, the government will pay the national debt in full?
No it doesn't work that way. Our government got stuck with the ever expanding interest payments. Those bailed out dodged that bullet and received no or reduced interest loans.
I recall that a substantial number of Republican senators supported Bernie Sanders' amendment on Dodd-Frank. I doubt that even they-- in their wildest dreams-- never thought the payouts would have been as high as the audit shows.
"There will be, in the next generation or so, a pharmacological method of making people love their servitude, and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies, so that people will in fact have their liberties taken away from them, but will rather enjoy it, because they will be distracted from any desire to rebel by propaganda or brainwashing, or brainwashing enhanced by pharmacological methods. And this seems to be the final revolution." -- Aldous Huxley
The author of this article, Matthew Cardinale, is a journalistic poseur who doesn't understand economics and did not fact check his blind assertions. TARP was sold to the public as being a program whereby the Fed bought bad mortgage-backed securities from the "too big banks" to get them off the banks balance sheets. In fact, only a small fraction of TARP handouts were actually used for that purpose as a "liquidity crisis" soother/smoke screen for public consumption.
The bulk of TARP was used by the "too big banks" and other key Wall Street players to re-inflate the stock market with a new round of dubious over-speculation in oil and food commodities, and derivatives including packaged sub-prime auto loans, sub-prime student loans and more sub-prime real estate loans to keep the markets "frothy" for plutocratic and corporate investors and keep "free trade" stock dividends generated by foreign labor flowing to upper-class and upper-middle-class Americans addicted to the "free trade" tit.
In fact, the vast majority of risky mortgage-backed securities were deliberately kept hidden on and off our "too big" banks' balance sheets and much of it is held by shadow banks including hedge funds. They, along with the Fed Chief Bernanke, have pushed policies on Congress and the Bush II and Obama administrations to do three primary things: (1) prop the big banks up on demand, (2) depress home values to drive as many home owners as possible out of the market while the big banks foreclose on vast new amounts of real estate, and (3) wait for home prices (or at least land values) to re-appreciate on as much of that bad paper real estate and as many of those foreclosed homes as possible--all at the expense of the general Welfare of the country. No telling how much of the Fed handouts they've used to hire bonded maintenance people to clean out and maintain those empty properties.
Matthew Cardinale's ignoramus gibberish notwithstanding, one of the MAJOR problems in the US, UK and EU economies is that no one really knows to this day exactly how much bad paper is still spread in which big banks across the system.
I won't even get into Germany's and France's refusal to create an EU bond to help stabilize the neo-liberal EU "project." Predictably, the EU has another neo-liberal banking crisis every other week and credit is threatening to seize up there just like it did in 2008 in the US.
Bank of America was clearly insolvent and on the edge of teetering over into collapse until Warren Buffet stepped in with $5 Billion dollars to prop it up last week--tragi-comically proclaiming what a good investment it was. President Obomberhoover and Federal Reserve Bank of New York apparatchiks DESPERATELY pressured, then booted the NY Atty. General off the 50 State task force looking into rampant, nationwide, illegal "too big" bank foreclosures because the guy actually wanted to press serious investigations and enforce the law on those banks. BOA is one of the biggest malefactors in illegal home foreclosures--that is PUBLICLY KNOWN to have been close to the edge. How close to the edge are the other "too big" banks? Citigroup, for instance? Go ask Ben "Omerta" Bernanke.
None of this bodes well. All of it means our banking system, which is tied at various levels to the even more shaky EU banking system, is in far more friable shape than most Americans know or want to know.
Compared to Benjamin Bernanke's crimes against this country (aided and abetted by Bush II, Hank Paulson, Timothy Geithner, Congressional "leaders" in both dominant Parties and Obama), only Obama's furtherance of Bush II era war crimes and assaults on civil liberties surpasses it in grotesqueness. But with respect to the economy, Obomberhoover comes off looking like a second rate tap dancer at a blackface Republican minstrel show starring Bernanke as 'Mr. Interlocuter," Obysmal as "Bones" and his AG lap poodle Eric Holder as "Tambo."
"There will be, in the next generation or so, a pharmacological method of making people love their servitude, and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies, so that people will in fact have their liberties taken away from them, but will rather enjoy it, because they will be distracted from any desire to rebel by propaganda or brainwashing, or brainwashing enhanced by pharmacological methods. And this seems to be the final revolution." -- Aldous Huxley-
"enhanced by pharmacological methods"-Aldous Huxley received A constant Intravenous supply of LSD at the time of his death..What A way to go out!!!
What did I tell you .... What did I tell ya... Its no mystery when a country this size is basically imploding. I'm sure people everyday think where the equity and growth of the U.S. has really gone. Now we know for certain.