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Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts

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www.unelected.org | January 26 2012

Bernie SandersThe first ever GAO (Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke, Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.

What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

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Monika Mitchell ~ The Federal Reserve – Helping the Rich get Richer

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Good Business International | November 29, 2011

BNP ParibasAs the Occupy Wall Street movement continues to throw light on the economic hardship of the 99%, the United States Federal Reserve continues to do its part to widen the economic gap between Wall Street and Main Street. The new plan is to purchase $545 billion worth (that’s a b) of mortgage-backed securities from the biggest banks in the universe – the ones who created the toxic debt in the first place. And that is on top of the $2.3 trillion (that’s a t) already vacuumed up by the Federal Reserve’s defaulting debt sucking machine.

So here we go again – one more time. The Federal Reserve is giving away taxpayer billions to those who deserve it least: the commercial and investment banking bond holders that crashed and burned the financial system and continue to be the biggest beneficiaries of government aid. Fed Chair Ben Bernanke, otherwise known as Uncle Ben, has authorized another unstimulating stimulus on top of the other unstimulating stimulus programs since the fall of 2008.

Bloomberg reports that the Fed “will start another program next quarter, [serving] 16 of the 21 primary dealers of U.S. government securities that trade with the central bank.” So who are these primary dealers? Let’s see….Merrill Lynch (now part of BofA), Goldman Sachs, Morgan Stanley, Citigroup, Credit Suisse, Nomura, Jeffries (highly exposed to MF Global), HSBC, BNP Paribas, Deutsche Bank, Barclays, JPM, UBS (a mess), RBS (didn’t they go bankrupt?)! Yup – the Fed is absorbing another half trillion dollars worth of the fruits of the 99%’s labor to the same folks who did them in.

This means that on top of the $700bn TARP funds authorized by Congress in October 2008, the Federal Reserve has authorized WITHOUT Congressional approval the purchase of nearly three trillion of mortgage-backed securities that nobody else wants. These paper docs might even be worthless.

Well, it proves one thing – crime does pay if you don’t call it a crime. The real crime is the one-sided backdoor bailout that continues to flow from the autocratic playbook of the Federal Reserve. Where have our democratic principles gone? Where is government of the people and by the people? Who are these “officials” making unilateral decisions for the American public who have never been elected to any office?

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