Thanks to reader Mark, I came across this report by US Senator Bernie Sanders about a GAO audit of the Federal Reserve that reveals that it secretly loaned out over $16 trillion dollars to American banks and businesses all over the world. The audit also revealed that there were people on the board of the Fed who seemed to be benefiting from the Fed’s actions.
Such audits of the Fed are a new thing this year, thanks to legislation sponsored by Sanders. It is ridiculous that such secrecy has been allowed for so long to institutions that are publicly funded and use public money.
I think that for various reasons the Fed, Defense Department, President etc., may have to act in haste and/or secretly, for the greater good. However, they should be subject to at least congressional oversight, even post facto. The matter of conflict of interest is serious and I think the persons who/whose organizations stand to benefit should recuse themselves. In this particular case was the Fed paid back fully, with a reasonable rate of interest. In the Final Analysis reason should prevail. Please note that I am not referring to this particular instance.
The Sub Prime saga created havoc. It left millions unemployed. It cost thousands their homes. It was a fraud of Gigantic proportions. Its effects are very much in evidence even today. As far as I am aware no one has been prosecuted. The Rating Agencies were grossly negligent. The originating Banks were clearly acting fraudulantly. The Investment Banks who were securitizing the loans were manipulating the system. How is it that no none was held accountable? To add salt to the wounds, the Persons Involved, The Banks, The Rating Agencies erc., are thriving! Unbelievable!!
“How about we spend our own wealth as we see fit? Spend on our own adventures. Do we really need piggy Banks? Or even less, virtual piggy Banks?”
Yes indeed, to make the ridiculous, the sublime dream again.
Galt’s Gulch is the only answer for this tyranny.
In fact, the ideas of this bailout is almost like “mission impossible”. Financial crimes will always bring widespread adverse effects, but unfortunately there are still a few people who like to play the “dirty game”.
This isn’t the first time I’ve hear of such unscrupulous behaviour. It has been standard practice in Japan.
During the 1990s when Japan went through a recession, it came to light that some financial companies were guaranteeing returns to big investors, even when stocks or investments lost money. The same protection was not given to individuals and small investors who were left to eat the losses. As now, the rich were protected, and the middle class were screwed over.
The practice of tobashi used to be common in Japan until the scandal broke, and it probably still continues despite being made illegal and is unethical.
http://en.wikipedia.org/wiki/Tobashi_scheme
.