Rewarding Reckless and Illegal Behavior of Greedy Wall Street Bankers

Federal Reserve Secrets and Lies

June 27, 2011

USAWatchdog.com - The Federal Reserve has been a clandestine organization since its inception. It is not really part of the federal government; it is merely a subcontractor for monetary policy.

The Fed is basically a cartel of both U.S. and European banks. It has pulled the levers in the economy from behind a curtain of secrecy since 1913 and has always enjoyed a certain degree of respect and admiration. All that changed when the economy melted down in 2008.

The respect and admiration of the Federal Reserve is being shredded right along with its veil of secrecy. The Fed allowed everyone to think the cost of controlling the 2008 financial crash was just a measly $3.3 trillion. This giant lie was exposed after Senator Bernie Sanders of Vermont put a provision in last year’s financial reform bill that forced the Fed to come clean on $9 trillion in additional emergency loans and bailout money.

The Fed funneled cash to foreign banks and companies right along with American banks and companies. It basically rewarded reckless and illegal behavior of greedy Wall Street bankers that caused the mess we are in now.

Nothing is fixed and nothing has really changed. The economy is still a wreck, and the Fed still wants its secrets.

CNBC reported last week that the Fed refuses to tell how much cash it sent to Iraq just after the invasion because it came from the “oil for food” program. The Fed claims it has to obey “rules.” The report said,

“The Fed’s lack of disclosure is making it difficult for the inspector general to follow the paper trail of billions of dollars that went missing in the chaotic rush to finance the Iraq occupation, and to determine how much of that money was stolen.” (Click here for the complete CNBC story.)

Taxpayers would be on the hook for the missing cash that the Defense Department says is $6.6 billion. This could represent the largest theft in history. The Fed didn’t obey any “rules” when it hid $9 trillion in bailout money. Doesn’t the Fed work for the U.S.? Apparently not.

Last week in Congressman Ron Paul’s Monetary Policy Subcommittee, Treasury Inspector General Eric Thorson assured Congress U.S. gold was safe. The gold is under the control of the Federal Reserve, and it has not been audited in decades. Paul wants an audit, and there are plenty of folks at the Fed who are against it. CNN reported last week on the hearing and said,

“During the hearing, Paul suggested that the Federal Reserve of New York, which has 5% of the U.S. gold reserves, has the ability to secretly sell or swap gold with other countries without anyone knowing.

“The Fed is pretty secret, you know,” said Paul, who leans Libertarian. “Congress doesn’t have much say on what’s going on over there. They do a lot of hiding.” (Click here for the complete CNN story.) (Click here to listen to some of Ron Paul’s hearing.)

Also last week, Fed Chief Ben Bernanke held a press conference and said,

“We don’t have a precise read on why this slower pace of growth is persisting.”

This is an astounding admission from the head of the Federal Reserve. Bernanke doesn’t know why the economy is failing? Economist John Williams from Shadowstats.com isn’t buying it. In his most recent report, Williams said,

“It is hard to believe that Mr. Bernanke, the presidents of the regional Federal Reserve Banks and the extensive staff of fine economists throughout the Federal Reserve System do not understand why the economic and systemic-liquidity crises persist. If indeed the problems really are not understood, Mr. Bernanke should not be Fed Chairman. More likely, the problems are understood, but Bernanke’s admitting that would entail his admitting that circumstances are beyond control, and that the Fed lacks the ability to address the issues effectively. . . . There is the possibility, though, that the comments were deliberate, intended as a warning of things to come. . .”

The Federal Reserve wants its dealings with bailouts and our nation’s gold to be kept secret. I don’t know if Bernanke is just incompetent, or if he continually lies about what is happening in the economy to keep the public from panicking. Do we really need the Fed with all their secrets and lies?