Fed Lies Unravel ... Bank Board Gave US$ 4 Trillion in Loans to Its Own Institutions
Dominant Social Theme: It is necessary for Fed board members to bail out their own banks. That's what it is there for.
Free-Market Analysis: "Quantitative Easing" ... "Operation Twist" ... "Discount Window" ... The mavens at the Fed have so much jargon at their disposal.
Not anymore. This is really simple to understand – see above.
Fed board members gave trillions to their own banks so the would survive the crisis of 2008.
They gave their own banks money. They put their own banks first. This is not hard to grasp.
It's cronyism. It's an abuse of power. It's criminal.
The Fed bankers can argue that they are SUPPOSED to hand out gobs of money. That's its public mandate.
But if they argue this way, they'll only remind the public of what they've done.
If they shut up about it, they'll look guilty as hell. As well they should.
Talk about a no-win situation.
The bankers will try to obfuscate using incomprehensible terminology. But it won't work.
Before the arrival of the Internet, the double-talk had a big impact. Nobody who was normal could understand quite what the Fed did (or central banks in general).
But all that's changed now. What we call the Internet Reformation is redefining the dominant social themes of the elite. They're losing on numerous fronts. We've been predicting it for years. Like the Gutenberg Press before it, the Internet is informing tens of millions about the Way the World Really Works.
As a result, the fear-based propaganda of the power elite is not working anymore. They are no longer able to frighten people into accepting phony globalist solutions like global warming, peak oil and water scarcity. One of the biggest memes of the elite is that the economy needs the ministrations of good, gray bankers to fix the price and volume of money.
Price fixing, in fact, never works and only redistributes wealth from those who created it to those who didn't and may not utilize as efficiently. The Fed's top bureaucrats were not prepared for the Internet or its exposure of fiat printing of money-from-nothing. Once the crisis of 2008 struck, the Fed's mavens reacted incompetently. They didn't know what to do.
Disaster struck when Rep. Alan Grayson (D-FL) grilled Fed Inspector General Elizabeth Coleman early in 2009 over some very basic questions about the trillions of dollars showing up on the Fed's expanded balance sheet. Coleman couldn't explain it.
We wrote an article then entitled "Beginning of the End? Fed Cannot Account for $9 Trillion." Here's something from the article:
By putting Coleman up in front of Congress in such an unprepared manner, the behind-the-scenes leaders of the Federal Reserve have provided an unimpeachable metaphor. Coleman's testimony punctured the veil of secrecy and her lack of preparedness lance whatever aura of competence Ben Bernanke and others have been able to conjure. Metaphors can NEVER be undone. They can be covered up over a great deal of time, perhaps, but they cannot be explained away or rationalized. They exist. That's why they're metaphors.
The economic ramifications of what is going on couldn't be more obvious either (well, to us, anyway). Post Coleman, the Fed is suddenly, inconceivably, an institution fighting for its political life. (Perhaps you read it here first ...) This financial behemoth, the most powerful single entity in the world, has likely already begun to topple. But as it is with any figure of titanic proportions, the fall is still silent to begin with for contact with the ground has not yet been made.
Central banking will likely survive in one form or another. No institution of such authority simply vanishes. The money and power of central banking guarantee that the mechanism will be perpetuated somehow – even expanded from sheer momentum. But a regrouping will have to take place. Even if central bankers are able to maintain the outward manifestation of the economic mechanism, it has begun to rot from the inside as it topples. It may take a month, a year, a decade but changes are coming.
We haven't changed our modest collective mind since then. We likened the Fed to a walking dead man and that still seems to us an apt analogy. Things are simply going from bad to worse.
If the Fed actually does get audited, as Ron Paul and Rand Paul hope, watch out! The revelations shall prove especially injurious.
But one way or another this most corrupt of all institutions is now in a battle for its life. The PR disaster of 2009 showed us clearly that the Fed's competence is a mile wide and an inch deep. Like all fakery, it's impossible to defend. No wonder so many top men are leaving.
We've predicted that monopoly fiat central banking generally is facing its largest challenge ever as a result of Internet exposure. As a result, we expect the powers-that-be to fight back by trying to change the monetary system.
Perhaps they shall try to create a world currency or a statist gold currency. It may or may not be enough to stem the damage now being done to this most important of all memes – the monetary meme.
Another possibility is that they will aggressively support the "public" banking proposed by Ellen Brown and Bill Still. The elites operate via mercantilsm, the use of government levers to benefit private agendas. Ms. Brown is unapologetically a big government type as are many other leftists and populists in the alternative media movement including luminaries such as Webster Tarpley.
Such individuals and those that support Georgism and other schemes always have a better idea. They are convinced that THEIR scheme is the correct one and that society ought to be manipulated to support it.
Here at DB, we restrict ourselves simply to observing that a private market ought to allow competitive money and that historically speaking gold and silver have proven out as monetarily popular. Silver has often been used as the people's metal and gold for the elites. The ratio between the two metals tends to signal whether any manipulation is taking place.
We offer no complex schemes, no complex arguments, no rigid mandates, no endless dissertations, no damnations of this or that strategy or utilization of interest ... no determination, in other words, that people be forced to use this or that formula. We don't "know best" though many others now commenting on money (and attacking free-market thinking) have it all figured out apparently. If you simply do as they say (and you better!) then all will be well.
We're not so smart, but we do know this: Money is actually pretty simple. One of Murray Rothbard's best books, "What has government done to our money?" is also his shortest. It ought to be read for its elegance and directness and also for its analysis of fiat monopoly central banks.
Today, in fact, central banking is under attack as never before, and for some of the reasons that Rothbard anticipated. Forcing people to use a certain currency or monetary methodology can never be justified, morally, financially or in any other way.
It's also an invitation to abuse. Power corrupts and absolute power corrupts absolutely. Doesn't matter if the scheme is "public" or "private" ... or whether the government is run by the "people "... or little green men from Mars. This is what's happened with the current form of central banking.
And that is why the Internet era has thrown such a spotlight on it, and we doubt it will survive the scrutiny. It is infinately corrupt. A handful of men can be seen divvying up trillions to benefit their own interests. There is no justification. Not even the fanciest words can explain it.
If central banking does survive, it will be likely in a much different form. This biggest of all sinecures for the power elite will be a less dependable source of revenue in the future. The ramifications are profound.
Conclusion: The 21st century is not the 20th. And the Internet is a process not an episode.