July 26, 2011

GAO: Fed Issued $US16 Trillion During 2008 Crisis!

Edwin Vieira, Jr. on the Fed's Transfer of Wealth

The Daily Bell

Tuesday, July 26, 2011 – by Staff Report
"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," Sanders said in a statement. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else." – Washington Post 

Dominant Social Theme: Simply a glitch. The US$16 trillion was issued in good faith by the stewards of the democracy. They were saving the "system." What, you didn't get any of it? Maybe next time ... 

Free-Market Analysis: With nary a ripple in the mainstream press, the US Government Accountability Office has released an "audit" of the Federal Reserve loan program in 2008 that, according to the Washington Post (see above excerpt) highlights possible conflicts of interest in the issuance of some US$16 trillion. We would bet it's more than that.

The GAO found two things wrong with the "bailout." First of all there were conflicts of interest; second, in making the determination that an emergency bailout was called for, the Fed's leaders imputed powers that probably were not really there. They acted like an entirely private enterprise even though they clearly are not.  

The GAO made recommendations that the Fed's top men are vowing to take seriously. But this is a joke. An institution that has in the past several years printed some US$20 trillion or more (including QE 1 and 2) – and no one really knows how much higher it is – is not going to voluntarily limit itself or its actions based on bureaucratic recommendations.

In fact, without the agitation of people like libertarian-conservative Congressman Ron Paul (R-TX), there would have been no audit to begin with. It wasn't something the Fed sought. Even so, the US mainstream press is not exactly providing aggressive coverage. It's not of great import, apparently. That's certainly the dominant social theme.

The meme is being conjured in numerous ways. One way the mainstream press is handling this is by focusing on the conflict-of-interest rather than the impossible numbers involved. Another way is by simply ignoring the issue. We searched Google News for cites and found only 72 articles. This news has received general coverage since perhaps Friday; at the same singer Amy Winehouse's death has received some 6,000 cites.

A search of the general Google queue (not just Google news) turns up nearly 500,000 cites. This is an absurdly skewed ratio. What it means in our view is that the Internet alternative news services (which Google refuses to allow in into its news algorithm) are covering the release while the mainstream is not.

Google, by the way, is continually fiddling with its news presentation and reducing in scope and size the presentation of alternative news. Even five years ago, Google made available a queue of articles from a variety of sources. But today, Google's front page news queue carefully presents mainstream sources first and makes alternative news sources difficult to find. This obfuscation is carried out within the guise of readership service and technology upgrades.

Back to the Fed. The elites are terrified about these numbers. We can tell by the way the dissemination is being downplayed, and we have written about this many times before.

Because of the Internet, the scope of the bailout cannot be concealed. Many people in the US and the Western world are quite aware that while they lost their homes and jobs, central banks were handing out TRILLIONS to the very entities that helped create the financial crisis. You can read an editorial about it here: Anthony Wile – The Morality of Gold.

This is the era of the Internet Reformation. Bankers are being nailed to the wall like Martin Luther's theses. The great, grasping mechanism of mercantilist central banking has been exposed for all to see. The bottom line issue is one of fairness. Comity and civil society are at risk when people feel they are being taken advantage of at a fundamental level.

This excerpt, above, lies at the heart of the unspoken dialogue that has taken place. People continue to do what they need to do survive but the moral construction of the Western economic system has collapsed. It wasn't meant to be this way, but that's how it turned out.

The elites counted on their control of mainstream media to cover-up the reality of the money system (that a handful of people can print as much money as they want whenever they want). But in the 21st century, thanks to the Internet Reformation, they have lost control.

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