Here is what the Federal Reserve didn’t want you to know: They helped large banks and other corporations out of a terrible jam. Sounds like a nice thing to do. Why wouldn’t they want us to know that?
Thanks to pressure from members of Congress like Bernie Sanders and Ron Paul, the Fed reluctantly submitted to the first audit in its 100 year history. Not a complete audit, but I suppose we have to be satisfied with what we get.
What the Fed probably didn’t want you to know was the extent of their generosity. They secretly gave $16 trillion. That’s $16,000,000,000,000 of U.S. currency. Their benevolence was extended to some of the largest financial institutions and corporations in this country, as well as to foreign banks and corporations.
They didn’t actually give the money out without strings. Rather, the Fed generously loaned the money with 0% interest (virtually none of it has been paid back). Some examples of their largesse: Citigroup got $2.5 trillion, Morgan Stanley $2.04 trillion, and Bank of America, $1.3 trillion. Foreign banks didn’t do too badly either. The Fed loaned Barclay PLC of the U.K. $868 billion, and Deutsche Bank of Germany received $354 billion. Many other big institutions in the U.S. and abroad were recipients of hundreds of billions more.
There happened to be some obvious conflicts of interest, too. According to Senator Sanders:
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.
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.
Administration of these loans from the Fed was outsourced to private contractors, most of which were no-bid contracts. Those companies included J.P. Morgan Chase, Morgan Stanley and Wells Fargo. In an amazing coincidence, these firms ended up being recipients of trillions of dollars of these loans.
You may recall how upset the American people were about the original TARP bailout in 2008 that insured $700 billion of “troubled assets.” And many citizens are furious about the $1.5 trillion government deficit this year. Once the public finds out that the Federal Reserve Bank bailed out huge financial companies to the tune of $16 trillion, they’ll likely go ballistic.
In theory, anyway.
For some reason, this $16 trillion bailout has slipped under the radar of the corporate media. The GAO audit was released near the end of July. It’s almost as if they don’t want us to know. You could make the case that America’s mainstream media is generously protecting us from upsetting news. When I was a journalism major, however, I don’t remember being taught about that being the role of the media.
That’s 16 trillion dollars of financial aid, ladies and gentlemen. Larger than the our national debt of $14.5 trillion, more than the $14.1 trillion total GDP of the United States. That kind of generosity is unprecedented, but maybe for reasons of modesty, Ben Bernanke, Chairman of the Federal Reserve, didn’t want this information to go public.
The information is out there. However, with this information essentially swept under the rug, the outrage isn’t.
POSTED IN OPEDNEWS.COM (Headline Status) 08/22/2011