Remember
that the FED is not apart of our government. It is a private banking
institution that feeds off of the interest paid by US taxpayers... A
debt that can NEVER be repaid.. Just the way they like it.
And the rich get richer..
Susoni
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Yesterday, the Senate Banking Committee held the
first of its hearings on widespread demands to reform the Federal
Reserve to make it more transparent and accountable.
Senator Elizabeth Warren put her finger on the
pulse of the growing public outrage over how the Federal Reserve
conducts much of its operations in secret and appears to frequently
succumb to the desires of Wall Street to the detriment of the public
interest. Warren addressed the secret loans that the Fed made to Wall
Street during the financial crisis as follows:
“During the financial crisis, Congress bailed
out the big banks with hundreds of billions of dollars in taxpayer
money; and that’s a lot of money. But the biggest money for the biggest
banks was never voted on by Congress. Instead, between 2007 and 2009,
the Fed provided over $13 trillion in emergency lending to just a
handful of large financial institutions. That’s nearly 20 times the
amount authorized in the TARP bailout.
“Now, let’s be clear, those Fed loans were a
bailout too. Nearly all the money went to too-big-to-fail institutions.
For example, in one emergency lending program, the Fed put out $9
trillion and over two-thirds of the money went to just three
institutions: Citigroup, Morgan Stanley and Merrill Lynch.
“Those loans were made available at rock bottom interest rates
– in many cases under 1 percent. And the loans could be continuously
rolled over so they were effectively available for an average of about
two years.”
One of the key reasons that the Fed wanted to
keep this information buried from the public is that Citigroup was
insolvent during the period it was receiving loans from the Fed.
There is also growing distrust of how some Fed personnel appear
to cozy up to Wall Street. During Federal Reserve Chair Janet Yellen’s
appearance before the Senate Banking Committee a week earlier, Senator
Warren severely criticized the actions of Scott Alvarez, the General
Counsel of the Federal Reserve. Warren said Alvarez had delivered a
speech before the American Bar Association challenging Dodd-Frank’s
so-called push-out rule that would bar insured depository banks from
holding dangerous derivatives and swaps on their books. Not long
thereafter, Citigroup slipped a repeal of the provision into the
must-pass spending bill that would keep the government running through
this September.
Warren noted that the Dodd-Frank legislation was
passed in 2010 but the Fed had stalled the implementation of the
push-out rule until 2016 – long enough for Citigroup to eventually have
it repealed, a feat which it has now accomplished.
Warren also revealed that Alvarez was
stonewalling her office in making his findings public on his
investigation into a leak of information from a September 2012 Federal
Open Market Committee (FOMC) meeting. The Senator noted that Wall Street
firms can make significant profits trading on leaked FOMC information
ahead of public disclosure. Warren said the public was still waiting two
and a half years later for Alvarez to disclose the details of what
occurred.
One of the four panelists at the hearing, Peter
Conti-Brown, an Academic Fellow at Stanford Law School whose forthcoming
book, The Power and Independence of the Federal Reserve, will be
published by Princeton University Press, also weighed in on the Fed’s
General Counsel. Conti-Brown said in his written statement:
“…while other general counsels at
administrative agencies are not subject to presidential appointment, the
Fed’s chief lawyer makes judgments of extraordinary importance that are
unlikely to ever be subject to judicial review. Courts have made clear
for eighty years that they will not review the Fed’s decision about monetary policy,
including when those decisions require novel interpretations of law.
And in the crisis, emergency decisions were made that have been
effectively removed from judicial review, including violations of state
corporate law and issues raised by the Constitution. While judicial
review still occurs in many of the Fed’s regulatory determinations, in
places where value judgments are of the most consequence, the Fed’s
lawyer is the first and last word on what the law allows or forbids. For
this reason, the Fed’s chief lawyer should be a presidential
appointment…”
Given the public’s disgust with President
Obama’s Wall Street appointments, this hardly seems like a solution that
will curry favor with the citizenry. A far more pragmatic solution
would be to strip the Fed of any regulatory role and let it get back to
its Congressional mandate of setting monetary policy.
In answer to a question on regulatory capture
at the Federal Reserve banks, Conti-Brown said “the very idea that
bankers are selecting their regulator – not through Congress but
directly through the exercise of vote should give us all pause…How could
the Reserve Bank presidents do anything but dance with the one that
brung them.” (Dodd-Frank eliminated the ability of Class A Directors
which consist of banking interests to vote on the selection of the
regional Fed Bank Presidents. However, Class A Directors elect three
Class B Directors who do get to vote on the selection of the Bank
President along with Class C Directors who are chosen by the Federal
Reserve Board of Governors.)
Senator Richard Shelby Delivering His Opening Statement at the Senate Banking Hearing on Fed Accountability and Reform
Senator Richard Shelby Delivering His Opening Statement at the Senate Banking Hearing on Fed Accountability and Reform
Senator Richard Shelby Delivering His Opening Statement at the Senate Banking Hearing on Fed Accountability and Reform
One area of complete agreement among the four
panelists at the hearing is that the New York Fed has far too much power
and it must be reined in. Senator Richard Shelby, Chair of the Senate
Banking Committee, quoted a passage from a recent speech delivered by
retiring President of the Dallas Fed, Richard Fisher. Shelby said Fisher
had stated that “too much power is concentrated in the New York Fed.”
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