Cryptocurrency: End The FED and Central Banks

grarpamp grarpamp at
Thu Jul 15 02:13:52 PDT 2021

Radical Fed Morphs From Central Bank To Bailout Kingpin... And
Americans Aren't Paying Attention

This evening, the PBS program, Frontline, will do something that
corporate broadcast media has failed to do since the financial crash
of 2008. Frontline will air the results of its year-long investigation
of the most powerful financial institution in the world – the central
bank of the United States – known as the Federal Reserve, or simply
“the Fed.”

The Fed’s radical makeover of itself began in December of 2007 when
the Fed decided, on its own, that it had the authority to secretly
pump out trillions of dollars in cumulative loans to prop up the mega
banks on Wall Street, as well as to the foreign banks that were on the
other side of Wall Street’s hundreds of trillions of dollars in
derivative trades. The Fed secretly ran that program through at least
July of 2010 according to the eventual audit that was conducted by the
Government Accountability Office. (That audit only came about because
Senator Bernie Sanders attached an amendment to the Dodd-Frank
financial reform legislation of 2010.)

The Fed’s latest massive bailout operation began on September 17,
2019, months before there was a case of COVID-19 anywhere in the
world. The full scope of this operation and other bailout programs
remain a dark secret at the Fed, casting a pall over investors’
confidence in the transparency and stability of the U.S. financial

James Jacoby, Writer, Producer and Correspondent, “The Power of the Fed.”

Frontline writers and producers James Jacoby and Anya Bourg, who are
the force behind tonight’s Frontline documentary, The Power of the
Fed, will now become part of a rarefied group of individuals who have
mustered the determination to cut through the Fed’s insidiously
cultivated armor of Fed-speak and its preposterous structure that
allows it to create trillions of dollars of money electronically out
of thin air for bailouts, with only feigned oversight by Congress.

We have not yet seen the Frontline program but we have high hopes
given the past work of Frontline. (See here and here.)

The Frontline team has the opportunity tonight to significantly build
on the herculean work of two other journalists who spent years
investigating the Fed and advancing Americans’ understanding of its
kleptocratic nature: Mark Pittman and Nomi Prins.

Mark Pittman was the Bloomberg News reporter responsible for the
Bloomberg lawsuit against the Federal Reserve during the 2008
financial crash. Pittman had asked the Federal Reserve Board, under a
Freedom of Information Act (FOIA) request in April and May of 2008,
for details of four lending programs, including the borrowers’ names
and the amounts borrowed.  The programs were the Discount Window, the
Primary Dealer Credit Facility, the Term Securities Lending Facility,
and the Term Auction Facility. When the Fed brazenly stonewalled
Pittman, Bloomberg News filed the lawsuit on his behalf.

On November 10, 2008 Pittman and his colleagues, Bob Ivry and Alison
Fitzgerald, wrote an article headlined “Fed Defies Transparency Aim in
Refusal to Disclose.” The article reports as follows:

    “The Federal Reserve is refusing to identify the recipients of
almost $2 trillion of emergency loans from American taxpayers or the
troubled assets the central bank is accepting as collateral.

    “Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson
said in September they would comply with congressional demands for
transparency in a $700 billion bailout of the banking system. Two
months later, as the Fed lends far more than that in separate rescue
programs that didn’t require approval by Congress, Americans have no
idea where their money is going or what securities the banks are
pledging in return.”

Pittman shared in a Gerald Loeb award for Bloomberg’s five-part
series, “Wall Street’s Faustian Bargain,” which described how a group
of Wall Street bankers had created the subprime doomsday machine over
Chinese food. Many believed Pittman’s investigations of the Fed put
him in line for a Pulitzer. But just a week before the secretive Fed
Chair Ben Bernanke was scheduled to sit for his Senate Confirmation
hearing for another term at the helm of the Fed, Pittman died of a
heart attack at age 52 on November 25, 2009.

At the time of Pittman’s death, the Fed was still refusing to release
the details of its trillions of dollars in secret loans, despite
losing its court battle at the District Court. The Second Circuit
appellate court decision, also ruling against the Fed, would not come
until March 19, 2010, four months after Pittman’s death.

But even after the appellate decision went against it, the Fed refused
to release the data. First the Fed asked for a rehearing by the Second
Circuit Court of Appeals. When that was rejected, a Wall Street
consortium of banks, that were the actual recipients of the trillions
of dollars in secret loans, appealed the case to the U.S. Supreme
Court. That appeal failed as well and the Fed was forced to finally
release the astonishing sums it had showered on global banks with zero
awareness by any elected member of the George W. Bush administration
or any elected member of Congress.

When all of the Fed’s bailout programs were tallied up, the tab came
to a staggering, cumulative $29 trillion, as meticulously analyzed by
the Levy Economics Institute. The Fed had kept the American people
completely in the dark as it sluiced these trillions to Wall Street
trading houses, foreign banks, the insolvent bank, Citigroup, even
hedge funds that were shorting (betting against) the market.

Today, the Fed is still stonewalling the public and refusing to
release the names of the recipients of some of its emergency bailout
programs and its $9 trillion repo loan program that began on September
17, 2019.

We reached out to Mark Pittman’s mother, Donna Pittman-Nealey, for her
thoughts on her son’s work to bring transparency to the Fed. She told
us this:

    “I can only say he was a pioneer in every way throughout his life.
He was never afraid to tackle any problem when he felt he needed an

    “I am so proud of all he did. So brave a person, smart, and kind.
He was so loved. We miss him.”

Nomi Prins has also done an extraordinary public service in bringing
sunlight to areas that the Fed would much rather keep in the shadows.
Prins authored the 2018 book, Collusion: How Central Bankers Rigged
the World.

Prins writes that “Eight years after the [2008] crisis began, the Big
Six US banks – JPMorgan Chase, Citigroup, Wells Fargo, Bank of
America, Goldman Sachs, and Morgan Stanley – collectively held 43
percent more deposits, 84 percent more assets, and triple the amount
of cash they held before. The Fed has allowed the biggest banks on
Wall Street to essentially double the risk that devastated the system
in 2008.”

Prins explains in the book that what the U.S. Fed and other major
central banks like the Bank of Japan and European Central Bank are
doing is “conjuring”  money. The money has been conjured or
fabricated, writes Prins, because the Fed and other central banks are
allowed to electronically create money at the push of a button.

The Fed is so captured as a regulator of the banks that Prins says the
Fed imposed no obligations on them in exchange for its bailouts. Prins
writes that the banks that “inhaled this cheap money were not required
to increase their lending to the Main Street economy as a condition of
the availability of that money….”

For its part in creating the most unstable financial structure in U.S.
history, the Fed is absolutely shameless. Prins writes that “The Fed
absolved itself of all responsibility for financial stability in the
big bank landscape in June 2017 when it allowed thirty-four of the
largest Wall Street banks, including the Big Six, to pass its stress
tests. In turn, the banks took this opportunity to buy more of their
own shares, elevating their stock prices rather than expanding their
loan services for small businesses and Main Street customers.”

This maneuver by the Fed resulted in announcements that Wall Street
banks planned “to buy back $92.8 billion of their own stock as a
direct response to the Fed’s blessing,” notes Prins, effectively
meaning that the Fed was “greenlighting legal manipulation of the
stock market.” Indeed, says Prins, “The Dow soared.”

The Fed and those same banks are back to the exact tricks again today.

Prins’ policy recommendations for removing the stranglehold that the
Fed has on America is to “implement actual oversight of the conjurers
and dedicate effective channels through which to question and curtail
their authority and actions.”

Let’s hope that the questioning of the unbridled powers of the Fed
begins in earnest with tonight’s Frontline documentary.

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