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Old 07-23-2011, 12:31 AM   #1
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The Fed Audit

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July 21, 2011
The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."
Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "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 said.
The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.
For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.
In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.
To Sanders, the conclusion is simple. "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," he said.
The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.
The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.
A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. "The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street."
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Old 07-23-2011, 12:37 AM   #2
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You forgot to include the 'FWD:' before the thread title.
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Old 07-23-2011, 12:46 AM   #3
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You forgot to include the 'FWD:' before the thread title.
http://sanders.senate.gov/newsroom/n...3-62060DCBB3C3
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Old 07-23-2011, 12:50 AM   #4
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This disclosure was made to set up a devaluation of the US dollar.

Rather by design or a product of unchecked greed the result will be the same, major reduction of wealth by the majority of America and anyone holding dollars.

Spend them now they are about to become next to worthless.

Watch what happens to gold going forward.
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Old 07-23-2011, 02:00 AM   #5
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Well the sun is going to come up tomorrow for me in America....lucky for me, my head is so far in the sand it's really in China so I'm golden. Dual citizenship!
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Old 07-23-2011, 03:09 AM   #6
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That $16tril is the total of all loans made by the Fed Reserve, not how much is outstanding. ie; If a bank or fund borrowed $10bil for the month, that counts as $10bil, but if they took out overnight loans for $10bil for 30days straight, it counts as $300bil.

The Fed Reserve's official balance sheet declares a jump from $900bil before the financial crisis to $2.4tril today:
~ $900bil of worthless mortgage-backed securities from Fred/Fan/Gin Mae
~ About $100bil in outstanding loans, remnants of AIG and Bear Stearns
But there's no record of what the original $900bil was composed of, what the missing $500bil is and if any of it is worth what's claimed. ie; The mortgage securities are waiting to be written off as total losses, not repaid, so claiming them as assets is inaccurate. It's like saying an old Sega Genesis in the attic is worth the couple hundred you paid for it originally. What the Fed has admitted is conjuring $2.3tril up so far, but no record of how that number is derived or means to verify it's accuracy.

This GAO report was not an audit, but a historical surface recount of some programs with no insight into the Fed's true worth or dealings. A major oversight is the "printing" of money to cover the mortgage securities.
~ Fed declares it has $1.25tril and uses it to buy default (worthless) securities from Fred/Fan/Gin Mae.
~ Then declares it's worth $900bil on its books for a total monetary creation of $2.15tril out of thin air.

What's also lacking from the Fed's balance sheet and this "audit" is the counterfeited, or 'Quantitative Easing' of initially $1.8tril, than another $600bil. Add those to the $900bil in securities alone, the actual $2.15 tril "printed" in the securities deal, with the additional $500bil in mystery assets, or just take the arbitrary total of $2.3tril admitted to;
And the Fed has circumvented the Treasury to fabricate $3.3tril - $4.55tril - $5.05tril - $4.7tril depending on count.
Who knows what the total counterfeiting by the Fed Reserve is, but the $4tril I've heard is probably a low-ball estimate. It should also be mentioned the Fed stated its intention to repurchase another $300bil as a QE3 without authorization or title.

Last edited by Boomhauer; 07-23-2011 at 03:44 AM..
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Old 07-23-2011, 04:04 AM   #7
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Quote:
Originally Posted by DBroncos4life View Post
Well the sun is going to come up tomorrow for me in America....lucky for me, my head is so far in the sand it's really in China so I'm golden. Dual citizenship!
Me too!
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Old 07-23-2011, 12:23 PM   #8
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Me too!
I find myself wanting to put my hand there
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Old 07-23-2011, 12:37 PM   #9
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Enjoy your sleep children.
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Old 07-23-2011, 03:18 PM   #10
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CEO salaries vs American workers over the past 20 years or so.......


CEO's +657%


CEO's win - American workers lose.


Make no mistake people - doesn't matter if you are Republican or Democrat, these elected officials are not calling the shots. You're a fool if you think so. We all know who is really calling the shots and controls what goes on world wide.
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Old 07-23-2011, 03:24 PM   #11
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CEO salaries vs American workers over the past 20 years or so.......


CEO's +657%


CEO's win - American workers lose.


Make no mistake people - doesn't matter if you are Republican or Democrat, these elected officials are not calling the shots. You're a fool if you think so. We all know who is really calling the shots and controls what goes on world wide.
Please elaborate. I'd like to hear your version of who controls the world.
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Old 07-23-2011, 04:01 PM   #12
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Please football gods. Let the season begin so this **** can go into the appropriate forum section.
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