Secrets of the Federal Reserve

"Essentially what the Fed has done is to change Uncle Sam into Uncle Sap. We have become the saps for Wall Street."


Actual Bailout May Exceed $10 Trillion

By Matt Renner, truthout.org


Ask most people on the street how much money taxpayers are using to save banks and you will probably hear the number $700 billion. [ . . . ]

But the actual number is much bigger. The current block of taxpayer money that has been pledged by the US government and the Federal Reserve to prevent the system from collapsing, according to an analysis by Bloomberg News, is roughly $12.8 trillion as of March 31. This money has been lent, spent or guaranteed to prevent a systemic collapse. The Bloomberg report and a chart showing broad categories of where the money has come from and the programs it funds can be found here.

http://www.bloomberg.com/apps/news?pid=20601087&sid=armOzfkwtCA4

Critics have pointed out that the Federal Reserve, the public-private partnership that controls the supply of dollars on the world stage and in the United States, controls the majority of this emergency money - $7.765 trillion - and is being secretive about where the money is going.

In an interview with Truthout, Rep. Alan Grayson (D-Florida), said the Federal Reserve is practicing "Enron accounting," and has "socialized Wall Street's bad bets." A lawyer with years of experience battling corruption on behalf of taxpayers and whistleblowers, Representative Grayson began a crusade to follow the bailout money after taking office in January 2009. As a member of the powerful House Financial Services Committee, Representative Grayson has been challenging bank executives and members of the Federal Reserve to disclose the terms of the massive hidden deals.

"The Federal Reserve likes to bill itself as an independent agency but what it really is is an agency that is entirely dependent on banks. When you look and see how it is structured, you see that Wall Street runs the show. This is something that people on the political right have been complaining about for decades. Everybody's worst nightmares are now taking place because we are seeing the transfer of literally trillions of dollars of wealth from the taxpayer to the bad banks," Grayson said.

Regarded by many as the most powerful institution in the world, the Federal Reserve operates in concert with the US government, but is not under public control.

See video here: Congressman Grayson Questions Fed
http://blip.tv/file/2104758

"In the [Citigroup deal] there are billions upon billions of dollars of income on these assets even after they go bad because they [the underlying mortgages] don't all go bad. So these assets produce billions of dollars of income every year and Citigroup gets to keep the income as well as the appreciation on the assets and the government just takes the losses," Representative Grayson told Truthout.

The Citigroup deal was made public because it involved other government agencies including the US Treasury. According to Bloomberg and Representative Grayson, the Federal Reserve has been engaging in transactions which it has kept off of its publicly available balance sheet.

"The strange thing about this is that only two trillion of this activity has turned up on the Federal Reserve's balance sheet. In the case of the Citibank deal, it is on Citibank's balance sheet and off the Federal Reserve's balance sheet, which makes no sense whatsoever," Grayson said, adding "The Federal Reserve has adopted Enron book-keeping procedures at this point."

The off-balance sheet activities of the Federal Reserve may have helped sick banks clear out their books and pass the so-called bank "stress test," according to Grayson. "Essentially what the Fed has done is to change Uncle Sam into Uncle Sap. We have become the saps for Wall Street," Grayson said.

Continue to roll your eyes here:

http://www.truthout.org/051309J?n