Bernanke footnote: Fed wants end to ‘minimum reserve requirements’Stephen C Webster | RawStory.com 

In the footnotes of a speech U.S. Federal Reserve Bank Chairman Ben Bernanke would have given to the House Financial Services Committee on Feb. 10, lies a unique and startling disclosure.

Hosted on the Federal Reserve’s own servers, the written testimony of the bank’s chairman explains in plain text what expanding the Fed’s powers will do.

“The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system,” footnote number nine, at the bottom of the page, explains without additional qualification.

Sen. Chris Dodd (D-CT), who is not running for reelection, is currently pushing a financial reform bill that would grant the Fed unprecedented new powers to regulate financial markets, including insurance companies and small lenders, under the auspice of forcing such firms to lessen their exposure to risky investments.

Wondering how that would have prevented a collapse the likes of which nearly sank the financial system at the end of George W. Bush’s presidency, Forbes writer John Carney mocked Dodd’s planas “incredibly stupid.”

“[The] Federal Reserve had regulators in place inside of Lehman Brothers following the collapse of Bear Stearns. These in-house regulators did not realize that Lehman’s management was rebuking market demands for reduced risk and covering up its rebuke with accounting sleight-of-hand. When Lehman actually came looking for a bailout, officials were reportedly surprised at how bad things were at the firm. A similar situation unfolded at Merrill Lynch. The regulators proved inadequate to the task.”

Yet, by the Federal Reserve’s stated assumption, that it will one day be able to eliminate the requirement forcing financial institutions maintain even a fraction of their depositors’ assets, it’s proposed mass-regulation of the financial sector sustains a brand of logic, however skewed.

Unhinging banks from even basic deposit standards would essentially create a class above the daily requirements of capitalism, resting atop a pool of funds with infinite depth, removing the need for what’s currently known as “fractional reserve banking.”

Such a system is described by Investopedia as such: “A banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Most countries operate under this type of system.”

What Bernanke is flatly stating is the need for that fraction, representing the actual wealth by which the bank’s capital multiplies, could soon be eliminated for the U.S. Federal Reserve, making free-floating, infinitely self-replicating capital a pervasive reality.

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David Reilly | Bloomberg.com 

The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.

The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generaleand Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail.

That move came a few weeks after the Federal Reserve and Treasury Department propped up AIG in the wake of Lehman Brothers Holdings Inc.’s own mid-September bankruptcy filing.

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Hush Son | Bloomberg.com 

The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.”

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Ryan Grim | HuffingtonPost.com 

In an unprecedented defeat for the Federal Reserve, an amendment to audit the multi-trillion dollar institution was approved by the House Finance Committee with an overwhelming and bipartisan 43-26 vote on Thursday afternoon despite harried last-minute lobbying from top Fed officials and the surprise opposition of Chairman Barney Frank (D-Mass.), who had previously been a supporter.

The measure, cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), authorizes the Government Accountability Office to conduct a wide-ranging audit of the Fed’s opaque deals with foreign central banks and major U.S. financial institutions. The Fed has never had a real audit in its history and little is known of what it does with the trillions of dollars at its disposal.

The amendment expressly blocks Congress from interfering with the independence of monetary policy decision-making, but opponents of the measure said that the political pressure would inevitably follow.

A desperate, last-minute attempt to thwart the move came in the form of an amendment championed by Rep. Mel Watt (D-N.C.) and described by its supporters as more reasonable. On Tuesday, however, the Huffington Post reported that, on a close reading, his amendment would in fact decrease transparency at the Fed by adding additional restrictions.

Backers of the Watt amendment pressed their case on Wednesday by sending a letter from a “political cross section of prominent economists” backing a measure like Watt’s. HuffPost reported, however, that those economists might well have be prominent, but they certainly aren’t a “political cross section.” Seven of the eight economists in question have extensive connections to the Fed — and half of them are currently on the Fed payroll. Those affiliations were not noted in the letter.

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James Quinn | Telegraph.co.uk

Federal Reserve chairman Ben Bernanke is set to meet with central bank governors from Italy, France and Japan at the annual gathering of at the Kansas City’s Federal Reserve’s annual symposium.

The key question to be addressed at the weekend meeting is how the US will be able to bring an end to its considerable intervention in the financial markets without stalling its tentative recovery.

Mr Bernanke is due to address the meeting on Friday in a closed session entitled “Lessons from a year in crisis.”

He is expected to touch on the need for stronger co-operation between regulators in different countries, as well as looking at ensuring the financial crisis does not re-occur.

His speech will also refer to the major events of the last year, not least those of last September, when the world was plunged into the worst financial crisis since the Great Depression following the collapse of Lehman Brothers.

Among those also attending are Mario Draghi, governor of the Italy’s central bank, Canada’s Mark Carney, Japan’s Masaaki Shirakawa, France’s Christian Noyer and the European Central Bank’s Jean-Claude Trichet.
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Paul Joseph Watson | PrisonPlanet.com

Federal Reserve chairman Ben Bernanke was confronted yesterday by Congressman Alan Grayson about which foreign banks were the recipients of Federal Reserve credit swaps, but he was unable to provide an answer as to where over half a trillion dollars had gone.
Asked which European financial institutions received the money, which was handed out by The Federal Open Market Committee (FOMC), a component of the Federal Reserve System, Bernanke responded, “I don’t know.”

“Half a trillion dollars and you don’t know who got the money?” asked Grayson.

As we have previously reported, the destination of trillions in bailout funds remains hidden after the Fed refused to disclose where it had gone despite a lawsuit filed by Bloomberg.

Bernanke said the Fed had a “long standing legal authority” to hand money to foreign banks under section 14 of the Federal Reserve Act, a claim contradicted by Bernanke’s own report, as Grayson soon highlighted.
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Jbearlaw | DailyKos.com

$24 Trillion.  That’s the estimated amount of loan guarantees, TARP and TILF money handed out, along with the other programs designed to bailout the financial industry.

That’s according to the Inspector General, Neil Barofsky.  But it’s nothing to worry about, according to the AP.

• Jbearlaw’s diary :: ::

The government’s maximum exposure to financial institutions since 2007 could total nearly $24 trillion, or about $80,000 for every American, the watchdog overseeing the federal government financial bailout said Monday.

Many of the programs are backed by collateral and the $23.7 trillion represents the gross, not net, exposure that the government could face. No one has suggested that the full amount, in fact, will be used.

Neil Barofsky, the inspector general for the TARP, said in a report to Congress that Treasury’s inaction means taxpayers have not been told what the financial institutions that have received assistance are doing with the money.

MSNBC.

I looked elsewhere for information on this, and didn’t find much.  HuffPost had this article, but no mention of a possible pricetag of $24 Trillion.

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Market-Ticker.Denninger.net 

I’m done being nice about this.

First, watch the following clip from CNBC. It is quite clear, and explicit.

This set off a veritable firestorm on CNBC, with various commentators coming in to defend Bernanke.

None, however, was more odious than Jim Cramer, who said we need “a little less democracy.“

What?

LESS DEMOCRACY Jim?

Oh, I get it.  You think that The Federal Reserve should be able to break the law any time it wants?  That it should be able to, for example, buy Freddie and Fannie paper even though the clear black-letter law says it cannot?  The Fed should be able to set up “Maiden Lane” LLCs like candy for the explicit purpose of hiding deteriorating assets which it also cannot legally purchase?

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Free Society | DailyKos.com

The Central Bank Monopoly might finally be audited sometime in the future for the first time in over 95 years (since the inception of the Federal Reserve system).  House Resolution H.R. 1207, the Bill to Audit the books of The Federal Reserve Oligarchs, now has 222 Congressmen/Congresswomen signed on as official co-sponsors.

The Federal Reserve Transparency Act (official title of H.R. 1207), is now co-sponsored by a majority of the U.S. House members, with Dennis Kucinich D-OH being the offical 218th co-sponsor. The bill is expected to pass by a very comfortable margin in the House, as long as Nancy Pelosi (”Bank Bailout” puppet) doesn’t find some parlimentary way to torpedo this opportunity for some long overdue government transparency.

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tommorrow morning.”

          –Henry Ford

Apparently nobody at the Federal Reserve now can account for some $9 Trillion dollars ($9,000,000,000,000.00) in off-balance sheet transactions.

• FreeSociety’s diary :: ::

When Rep. Alan Grayson (D-Orlando) asked Inspector General Elizabeth Coleman of the Federal Reserve some very basic questions about where the trillions of dollars that have come from the Fed’s expanded balance sheet, the Inspector General didn’t know. Worse, nobody at the Fed seems to have any idea what the losses on its $2 trillion portfolio really are.   Rep. Alan Grayson said: “I am shocked to find out that nobody at the Federal Reserve is keeping track of anything.”  

Story at:  Whoops…Federal Reserve “loses” $9 Trillion dollars

Jim Grant, editor of Grant’s Interest Rate Observer, told CNBC, that The Federal Reserve’s balance sheet is so out of whack that is undercapitalized in a way that Citicorp is undercapitalized.

In addition to H.R. 1207, progressive Senator Bernie Sanders also has drafted a U.S. Senate Bill, S.604, called The Federal Reserve Sunshine Act, which currently has one U.S. Senate co-sponsor, Senator Jim DeMint.
______

So what or who are “The Federal Reserve“, besides just the biggest Robber Barons on the Earth? Dennis Kucinich explains:

“The Fed, when it was created in 1913, actually the money creation power of the Country was removed … to private hands. This is something that most Americans don’t have any clue about. So the Federal Reserve, first of all, needs to be held accountable within their sphere of activities now, because they played a role in looking the other way when the sub-prime loan scandal was burgeoning. They played a role in looking the other way not regulating activity in hedge funds, and the speculators on Wall Street. And they played a role in looking the other way with respect to the practises of the financial community .. which essentially they’ve taken a laissez-faire approach.  You know, the Fed at least should be reformed, and at best there should be a repeal of the 1913 authorization, and we need to look at the money power issues in order to reclaim our democracy.

I have long believed that the debt-based nature of our monetary system, has a lot to do with way in which wealth accumulates and accelerates upward.”

      –Dennis Kucinich, -Democratic Congressman, OH

If you’ve ever wondered just who owns and profits by the Federal Reserve System (off the backs of American citizens money), here is some of the documented ownership history:  Who Owns The Federal Reserve.

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Steve Watson | InfoWars.com 

At time of writing, a bill that would see the Federal Reserve bank audited for the first time in 59 years has 207 cosponsers in the House and is gaining traction with every single day.

This means just 11 more are needed for a majority to be reached in the House.

If enacted, HR 1207 will amend title 31 of the United States Code and reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States.

In other words, for the first time since 1950, the the independent financial powerhouse that creates and regulates all money in the US will be forced by law to open its books.

HR 1207 was sponsored and introduced by Rep. Ron Paul. On February 26, 2009, it was referred to the House Committee on Financial Services, where it remains under consideration.

HR 1207 also has a companion bill, S 604: F R Sunshine Act of 2009, in the Senate.

This news also dovetails with reports detailing how the House Oversight and Government Reform Committee, the panel responsible for investigating the use of bailout money, has issued a subpoena to the Federal Reserve, asking them to hand over all documents relating to the takeover of Merrill Lynch by the Bank of America.

Claims by New York Attorney-General Andrew Cuomo that former Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke strong-armed BofA into buying Merrill, could see the two exposed to prosecution.

There is no doubt that the privately owned Federal Reserve is in hot water, and it knows it.

As we reported last week, the Fed is hiring a veteran lobbyist to “manage its relations with Congress”. According to a Reuters report, the Fed plans to hire Linda Robertson, who previously worked for now-defunct energy company Enron, as well as the Clinton administration.

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10 reasons why Wall Street has absolute power over America’s democracy

Paul Farrell | MarketWatch.com

ARROYO GRANDE, Calif. (MarketWatch) — Two mind-numbing fast-paced dramas. Two parallel worlds. One real, one fiction, both deadly. Jack Bauer, mythic hero of “24.” Dying from a deadly bio-pathogen leaked from weapons developed by Starkwood, a rogue mercenary army attacking the presidency, hell-bent on taking over America.

The other drama in play: “Hank the Hammer” Paulson, iconic Wall Street hero, a Trojan Horse placed inside Washington by Goldman Sachs as Treasury Secretary in control of America’s $15 trillion economy. Goldman, a modern dynasty with vast financial powers much like those once used by the de’ Medici, Rothschilds and Morgans to control nations.

Both dramas play high-stakes games with financial WMDs that have lethal consequences. Jack compresses thrills, kills and chills into 24 hours. Hank, Goldman and their army of Wall Street mercenaries move with equally blinding speed, heart-pounding action.

Drama? You bet. Six short months ago Hank led an assault on Congress. The scene parallels one in “24:” Sangala War Lord Juma’s brazen attack inside the White House. But no AK-47s necessary. The Hammer assaulted Congress with just a two-and-a-half page memo in hand. Like a crack special-ops warrior, he took down the enemy, demanding $750 billion, absolute control, total secrecy, no accountability and emergency powers to act immediately … warning that inaction was not an option, that collapse of America’s banking system was imminent, would bring down the global monetary system, pushing world’s economies into a “Great Depression II.” Congress surrendered.

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In the video here, the former Clintonite Dick Morris, who is now a darling of Fox News, tells Sean Hannity the globalists will put the “American economy under international regulation” and “those people who have been yelling, oh, the UN is going to take over… they’ve been crazy, but now they’re right.”

It’s the “international regulation of the financial institutions” we have to worry about, warns Dick Morris. It will happen under “IMF control… Remember, the IMF is run by the Europeans and backed by Americans.”

It’s too bad Mr. Morris didn’t give us the rest of the story. The IMF is a loan sharking operation created by the bankers under the Bretton Woods scheme and its primary purpose to date has been to get third world nations into hock so they can be more effectively looted. It is now poised, as Morris eludes, to embark on a far more ambitious bankster scam — to initiate something called “global quantitative easing” by printing billions of dollars worth of a global “super-currency,” deceptively billed as a way to address the economic crisis manufactured by the global elite.
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Eric Zimmerman | TheHill.com

Rep. Michele Bachmann (R-MN) has introduced legislation that would “bar the dollar from being replace by any foreign currency.” A statement from Bachmann’s website:

“Yesterday, during a Financial Services Committee hearing, I asked Secretary Geithner if he would denounce efforts to move towards a global currency and he answered unequivocally that he would,” said Bachmann. “And President Obama gave the nation the same assurances. But just a day later, Secretary Geithner has left the option on the table. I want to know which it is. The American people deserve to know.”

On Monday, Geithner and Bernanke both rejected the idea of a global currency in Congressional testimony. But in remarks to the Council on Foreign Relations yesterday, Geithner indicated he was open to the idea.

Matt Taibbi | RollingStone.com

It’s over — we’re officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country’s heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That’s $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG’s 2008 losses).

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PBS station, KBDI, in Denver Colorado broadcast the groundbreaking expose, America: Freedom To Fascism to raise funds for the station. They invited Gary Franchi to come and talk about the points of the film during breaks.

To support KBDI please consider making a pledge so they can continue broadcasting the message to truth to the American people.

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Category: News & Politics

Mark Pittman and Craig Torres | Bloomberg.com

The Federal Reserve Board of Governors receives daily reports on bailout loans to financial institutions and won’t make the information public, the central bank said in a reply to a Bloomberg News lawsuit.

The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast “a stigma” on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral.

Fed secrecy was the focus of a Senate Banking Committee hearing today in which the panel’s top two members said the central bank’s reluctance to identify companies benefiting from the American International Group Inc. bailout risks undermining public confidence in the government.

“If the American taxpayer’s money is at stake, and it is, big time, I believe the American taxpayers, the people, and this committee, we need to know who benefited, where this money went,” said Senator Richard Shelby of Alabama, the committee’s top Republican. “There is no transparency here. We are going to find out.”

The bank provides “select members and staff of the Board of Governors with daily and weekly reports” on Primary Dealer Credit Facility borrowing, said Susan E. McLaughlin, a senior vice president in the markets group of the Federal Reserve Bank of New York in a sworn statement. The documents “include the names of the primary dealers that have borrowed from the PDCF, individual loan amounts, composition of securities pledged and rates for specific loans.”

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