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Dear Congress: Bernanke Just Lied to You

EB's picture





 
 
Dear Congress,
 
On December 6, 2011, Ben Bernanke, Chairman of the Federal Reserve System (the Fed),responded to recent media accusations regarding the Fed's emergency lending during the financial crisis. In attempting to correct "numerous errors and misrepresentations", Mr. Bernanke himself relies on a variety of misleading, if not outright deceptive, tactics and fact-twisting. It's important to set the record straight, which is that the Fed abhors transparency and indeed subsidized to the greatest extent the large banks that it faithfully serves.
 
Below, I excerpt and comment on the most egregious affronts on truth made by Mr. Bernanke, which he presents as evidence of his claims. All emphasis is mine.
Correction of Recent Press Reports Regarding
Federal Reserve Emergency Lending During the Financial Crisis
 
Recent press reports contain numerous errors and misrepresentations about Federal Reserve emergency lending during the financial crisis.
 
First, these articles have made repeated claims that the Federal Reserve conducted "secret" lending that was not disclosed either to the public or the Congress. No lending program was ever kept secret from the Congress or the public. All of the programs were publicly announced when they were initiated, and information about all lending under the programs was publicly released--both on a weekly basis through the Federal Reserve's public balance sheet release and through detailed monthly reports to the Congress, both of which were also posted on the Federal Reserve's website.
This is a common tactic of Mr. Bernanke, whereby he cloaks himself in the after-the-fact limited disclosures provided on the websites of the Fed and the Federal Reserve Banks, often made only after significant arm twisting. Most of the details, when they are released, such as counterparties or program agreements, are done so long after the time when public debate might have increased scrutiny on what now look like suspicious dealings.
 
For instance, when Bear Stearns failed and most of its operations and portfolio were taken over by JP Morgan Chase (JPM), the Federal Reserve Bank of New York (FRBNY) loaned $28.82 billion to a new corporate entity it helped create called Maiden Lane, in which about $30 billion of the most toxic Bear Stearns assets were placed. The Fed sold the program to Congress and the public as a wind-down facility, yet when details finally began to be dribbled by the Fed and FRBNY over a year later (and only because of substantial Congressional and public pressure), it became apparent that Maiden Lane was being aggressively traded by BlackRock, as asset manager. Indeed, the value of the mortgage backed securities (MBS) portion of the portfolio, a potential profit center in contrast to other distressed assets, such as Red Roof Inn loans, swelled from $11.4 billion as of September 30, 2008 to $19.9 billion as of June 30, 2010.
 
In addition to the FRBNY loan, JPM had also loaned Maiden Lane $1.15 billion and was first in line to take a loss. Inasmuch as BlackRock was also trading MBS securities on behalf of the Fed as part of its $1.25 trillion MBS purchase program, there are significant potential conflicts of interest that arise. Indeed, the Government Accountability Office (GAO) found numerous conflicts of interest in the way no-bid contracts were awarded by FRBNY during the crisis. Personal research, which will be happily shared should you request, reveals that FRBNY outright lied to the GAO with respect to one of the largest no-bid contracts. In a follow up report,the GAO noted that the Fed did not provide adequate guidance to its Federal Reserve Banks to ensure that emergency program participants were treated equally. Clearly, the Fed was not treating everyone equally and has much to hide.
Bernanke continues:
It is true that, generally, the names of the counterparties and borrowers from the emergency facilities were not immediately disclosed, consistent with general central banking practice. Releasing the names of these institutions in real-time, in the midst of the financial crisis, would have seriously undermined the effectiveness of the emergency lending and the confidence of investors and borrowers. These matters were discussed extensively at the time in the press, and the Chairman and other members of the Board discussed them numerous times in hearings before the Congress.
 
In point of fact, the Federal Reserve took great care to ensure that Congress was well-informed of the magnitude and manner of its lending. As required by the Emergency Economic Stabilization Act, passed in late 2008, the Federal Reserve reported regularly on the outstanding balances in its Sec. 13(3) lending facilities as well as on collateral (by type and quality) for the loans. Beginning in June 2009, the Federal Reserve went well beyond these legal requirements in the information it made available in its monthly public reports to the Congress, which were also posted on the Federal Reserve's website.
It bears repeating that the Fed is only forthcoming when it faces substantial pressure or when it is outright compelled to because of Congressional or Judicial action. When Mr. Bernanke thumps his chest about the details released on these programs, be assured these disclosures were not his preferred choice.
Moreover, Congress was well informed of the volume of borrowing by large banks. For instance, the monthly reports showed the daily average borrowing during the month in the aggregate for the five largest discount window borrowers, the next five, and the rest. Similar information was also provided for lending at the emergency facilities.
 
In addition, the issue of counterparty disclosure was well-known to the Congress and was addressed as part of the Dodd-Frank Act. Under provisions of the Sanders Amendment, the names of all counterparties and borrowers from the emergency lending facilities and the Term Auction Facility (TAF) were disclosed on December 1, 2010. Data provided included the names of the borrowers, the date that credit was extended, the interest rate, information about the collateral, and other relevant terms. Similar information is supplied for swap line draws and repayments. Details for each agency MBS purchase included the counterparty to the transaction, the date of the transaction, the amount of the transaction, and the price at which each transaction was conducted. Additional disclosures of discount window borrowers and transactions information were made on March 31, 2011.
As Bloomberg notes in its refutation, without proper detail of all the transactions, you and your colleagues in Congress were indeed in the dark. Also, Mr. Bernanke uses a subtle deception to imply complete disclosure has been made regarding the Fed's MBS transactions, which constitute its largest asset class of purchases. Details released by the Fed (and only because of Congressional mandate) were made only for the period January, 2009 through August, 2009, when actual MBS purchases and sales began in late 2008 and continued through mid-2010, having again restarted recently.
 
In addition, all such disclosures were made only with respect to the Fed's $1.25 trillion MBS purchase program. Few details of the MBS transactions in the Maiden Lane "wind down" portfolio of Bear Stearns assets have been made. And when they have been disclosed, they are for different windows in time. Accordingly, it is possible (though not possible to prove based on the incomplete public record) that BlackRock was trading both sides to generate profits for Maiden Lane to avoid a $1.15 billion loss by JPM. This by itself suggests the Fed deserves more, not less, scrutiny, the self-serving, deceptive pleas of Mr. Bernanke notwithstanding.
Skipping ahead:
Although the articles do not stress this point, it is important to note that nearly all of the emergency assistance has, in fact, been fully repaid or is on track to be fully repaid. This fact has been verified both by the Board's independent auditors and the Government Accountability Office (GAO).
 
Importantly, Federal Reserve lending should in no way be compared with government spending. Federal Reserve lending is repaid, with interest, and the Federal Reserve has never suffered a credit loss. As provided in the Dodd-Frank Act, the GAO conducted a review of all of the emergency lending facilities and confirmed in its report on July 21, 2011, that not only were there no material issues with respect to the design, implementation and operation of the facilities, but that all loans to the facilities were fully repaid or expected to be fully repaid.
Mr. Bernanke touts the fact that the emergency lending facilities are (or are on track to be) repaid. With respect to Maiden Lane, that is indeed thanks to the aggressive trading performed by BlackRock, contrary to the Fed's public disclosures made in early to mid 2008 in your chambers. More importantly, in mentioning that the Fed has never suffered a credit loss, Mr. Bernanke evades a more important point--that it will likely take substantial capital losses on many of its purchases. That is, the Fed bought many of the securities in its portfolio above prevailing market prices, which itself is a subsidy for its primary dealers, and it will lose money on a substantial number of these purchases when they mature. This is especially so with its more than $1 trillion portfolio of MBS securities, which lose money when mortgage rates fall (as they have done several times over the last year and a half). More on this in a bit.

Third, the articles make no mention that the emergency loans and other assistance have generated considerable income for the American taxpayers. As reported in the Annual Report of the Board of Governors, alongside the Board's audited financial statements, the emergency lending programs have generated an estimated $20 billion in interest income for the Treasury. Moreover, in 2009 and 2010, the Federal Reserve returned to the taxpayers over $125 billion in excess earnings on its operations, including emergency lending. These amounts have been publicly announced and are reflected in the Office of Management and Budget's financial statements for the government and have been verified by the Federal Reserve's independent outside auditors. The Federal Reserve is on track to return a comparable amount to taxpayers this year as well.

Because of its massive purchase programs and balance sheet expansion, the Fed has indeed remitted $125 billion over the last two years to the US Treasury from the proceeds of interest on its securities (after payment of the Fed's own, largely non-disclosed expenses). If I can hammer one thing home, Congress, that serves your vital interest, it is the following: large payments by the Fed to the Treasury are a temporal anomaly and will not last. In fact, it is more likely that the member banks of the Fed, disproportionately, the larger banks, will end up with this cash instead. Read on, as to why.
 
After the Fed massively expanded its balance sheet through the creation of reserves (printing digital money), it has attempted to mitigate price inflation by encouraging banks to keep such reserves parked at the Fed. This program, accelerated by you, Congress, in October, 2008, approved the payment of interest on reserves. As long as short term rates are exceptionally low (and Mr. Bernanke said they would be through mid-2013), this is a minor expense. Meanwhile, the Fed is earning higher interest rates on the $2 trillion+ in securities it bought as part of its so-called QE programs. It is the spread between what it earns and what it must pay that allows the Fed to remit funds to the Treasury, and by extension the taxpayers.
When (and not if) short term interest rates rise (and the markets might force this in a violent fashion long before Mr. Bernanke would prefer), the Fed could easily go cash flow (or carry) negative. That is when the cost of paying banks interest on reserves (to reign in price inflation) exceeds the Fed's interest income it receives on the securities it holds. Consider that just under three decades ago, short term rates quickly reached nearly 20%.
 
In response, the Fed could outright sell assets that it holds, but I urge you to consider what happens when the world's largest holder of Treasury securities switches from being a net buyer to a net seller of Treasurys and what it would do to the United States' long term borrowing rates. Mr. Bernanke believes that he can blissfully guide the Fed to a graceful exit from its $2 trillion+ balance sheet expansion. You might not wish to give him the benefit of the doubt.
 
This scenario is not lost on the Fed, which is why in March, 2009, its Board of Governors concocted a fraudulent accounting scheme (implemented retroactively to include the year 2008), which allows it to operate with negative income. It also prevents its member banks from having to pony up the difference, which was the case prior to the accounting change. Instead, in this scenario, the interest that the Treasury pays on securities held by the Fed will go to the banks, instead of back to the Treasury.
 
It's beyond the scope of this response to discuss all the details. However, in brief, the Fed allows a line item on the liability side of its balance sheet (specifically, the one that covers remittances to the US Treasury) to go negative. It creates a deferred asset from a hypothetical amount it will be remitting to the Treasury at some non-specified time in the future.
 
The heads of anyone with accounting knowledge ought to be spinning right now. For everyone else, it's as though you or I could log into our bank account and increase our balance in any given month in which expenses exceed income, with the promise that we will correspondingly lower our balance the next time we have a surplus.Only, there is no guarantee that you or I would ever again generate a surplus--meaning, we would have printed ourselves money not to be repaid. Similarly, there is not any reason to believe that once the Fed goes cash flow negative that it will ever again generate a surplus.
 
This creates the absurd scenario that the Fed could end up printing money as a tightening measure to reign in price inflation. Welcome to the grave that Mr. Bernanke continues to dig deeper for us. He assures us there will be nothing but an orderly withdrawal from this unprecedented activity. However, markets have a way of punishing central banker hubris.
Fourth, the articles discuss the lending made to large banks but never note that Federal Reserve lending programs went far beyond such institutions--all in furtherance of supporting the provision of credit to U.S. households and businesses.Literally hundreds of institutions borrowed from the Federal Reserve--not just large banks. The TAF had some 400 borrowers and the discount window some 2,100 borrowers. The TALF made more than 2,000 loans, while the commercial paper funding facility provided direct assistance to some 120 American businesses.
 
The articles also fail to note that the lending directly helped support American businesses by providing emergency funding so that they could meet weekly payrolls and on-going expenses. The commercial paper funding facility, for example, provided support to businesses as diverse as Harley-Davidson and National Rural Utilities, when the usual market mechanism for their day-
to-day funding completely dried up.
Not surprisingly, not once in Mr. Bernanke's missive does he even allude to the primary cause of the freezing of the very funding markets he takes credit for saving. Namely, his yo-yo manipulation of the money supply, noted by Austrian economist Robert Wenzel at EconomicPolicyJournal.com in real time, just prior to the onset of the crisis. To be sure, this might not be the position of most "mainstream" economists. Yet, if it is their guidance upon which you are relying, consider the article quoted in the prior link by FRBNY's own Simon Potter, Executive Vice President and Director of Economic Research at FRBNY, wherein he candidly admits the failures of mainstream economic forecasts.
 
While loans in certain programs might be broad-based and cover many industries, it is beyond dispute that the bulk of the loans went to the banks, and to some in particular, in disproportionate amounts.
Skipping ahead, again:
Fifth, the articles misleadingly depict financial institutions receiving liquidity assistance as insolvent and in "deep trouble." During a financial panic, otherwise solvent banks and other financial institutions can be forced to sell assets at fire-sale prices in order to meet the demands of depositors and other sources of funding. Central bank liquidity lending is designed to stem the panic by giving financial institutions a source of financing that permits them to refrain from selling assets during the panic. Again, unmentioned in these articles--but a central point--all discount window loans extended during the crisis were fully repaid with interest, indicating that, with rare exceptions, recipients of these loans generally suffered from temporary liquidity problems rather than being fundamentally insolvent. In the handful of instances when discount window loans were extended to troubled institutions, it was in consultation with the Federal Deposit Insurance Corporation to facilitate a least-cost resolution; in these instances also, the Federal Reserve was fully repaid.
Because of the nature of fractional reserve banking, what constitutes a "solvent" versus an "insolvent" bank, especially in the realm of the too-big-to-fail size is an imprecise, subjective, moving target. Even granting regulator omniscience over events, it is dishonest to assert that one can judge a liquidity versus a solvency problem with the application of 20/20 hindsight when only one option was realized.
 
For instance, in the maelstrom of the Fall 2008, had the regulators decided to not close Wachovia or WaMu, and had such banks received as much temporary liquidity as the many European banks not subject to those same regulators (such as Belgian bank Dexia and French bank SocGen), who is to say if Wachovia and WaMu might not have emerged "solvent" after months of liquidity injections? It simply displays a lack of imagination for Mr. Bernanke to assert, "well, they didn't fail because we propped them up with liquidity until they could repay the loans, unlike certain other firms that were unilaterally told or allowed to fail based on metrics that are impossible to apply consistently across all firms".
 
Based on the Fed's own loan disclosures that Mr. Bernanke reluctantly embraced only when faced with the frightening alternative of a full scale audit, the Fed allowed banks to pledge junk-grade collateral for cash at as little as 0.25% over the Fed's Federal Funds target interest rate. Indeed on many days in certain emergency programs, by far the largest asset class pledged as collateral were stocks, including those of bankrupt companies. In other words, the banks with largest trading books had the most assets to pledge to get Fed cash at below market interest rates. This fact, ignored by Mr. Bernanke, disproportionately favored the largest banks that had taken on the largest amount of leverage.
Mr. Bernanke closes with more falsehoods:

Finally, one article incorrectly asserted that banks "reaped an estimated $13 billion of income by taking advantage of the Fed's below-market rates." Most of the Federal Reserve's lending facilities were priced at a penalty over normal market rates so that borrowers had economic incentives to exit the facilities as market conditions normalized, and the rates that the Federal Reserve charged on its lending programs did not provide a subsidy to borrowers.

Note that Mr. Bernanke does not directly challenge the fact that banks received loans at belowprevailing market rates. He makes a temporal shift to say that the Fed loans were made at rates that would pay a penalty under normal conditions. This is irrelevant because it is precisely the ability of those banks chosen to succeed to get loans at below market rates that allowed the rapid and considerable consolidation of the too-big-to fail banks during the crisis period. To deny this was not an outright subsidy to certain borrowers, particularly those with large trading books, is simply a lie.
 
Conclusion
Being practical, I fear that what will emerge from the populist anti-Fed sentiment might be worse than the present situation. However, this does not mean that the Fed and Mr. Bernanke, in particular, should continue to be given carte blanche to toy with the economy and the lives of billions based on theoretical models that have a history of nothing but failure.
 
That Mr. Bernanke would feel compelled to respond to Congress in response to a few media articles indicates he is still hiding much, much more than he has been compelled to disclose. It is time to up the ante and mandate a full scale audit of the Federal Reserve System (and not by the GAO or compromised big four).
 


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Sun, 12/11/2011 - 13:17 | Link to Comment cristo
cristo's picture

don't worry Burnamke will be out of job by 2012 .The federal reserve was established in 1913 with a 99 year charter wich means that the fed will be dead in 2012 putting Burnamke out of a job . end the F E D in 2012 has always been the plan .

Sun, 12/11/2011 - 16:07 | Link to Comment dizzyfingers
dizzyfingers's picture

Pretty sure the ink is already dry on the Fed's new 1000 year charter. Obama executive order.

Sun, 12/11/2011 - 08:54 | Link to Comment Smiddywesson
Smiddywesson's picture

Bernanke is nothing more than a skilled technician in the employ of TPTB.  

The game, as we all know here on ZH, is to fix absolutely nothing while proping up the banks and stalling long enough to acquire the amounts of gold necessary to start a new monetary system that isn't based on the dollar and debt.  The game is to stall and print only enough to get through another day.

That being said, we can expect a few late stage ploys just before the end of the game.  One will be the announcement of a super duper program of printing several months out into the future which they have no intention of doing, but they just announce it to buy a few more months of time.  The other is to get rid of the Bernank.  Doing so would do absolutely nothing to fix things, but it would give them weeks and weeks of drama during which they could take attention away from what is going on in the markets.

Indicators that the end is at hand:

  • Super duper QE
  • Bernanke gets the boot
  • War
  • Widespread and violent civil unrest
  • Decoupling of physical and paper pm prices, or just a crash or ramp in pm prices
  • Any period up to, during, or immediately after a G20 meeting.  If gold prices rise immediately prior to such a meeting, you know the new gold standard is at hand.  You will likely see the ministers return to their constituate contries, brief up their political heads, and then an annoucement will be made.  Based on past decisions, I give that two weeks tops.  Any movement in PM prices near the dates of these meetings means you are out of time.

These are your canaries in the coal mine.  They tell you that you're out of time to buy gold, but that's when you panic buy everything else you need.  You will still be able to get all the food and goodies you need to live and barter with like imported pint bottles of booze.  Yes barter.  Even if they can cash it, nobody will know how to price a gold or silver coin, so barter will rule for at least a few weeks.  

Everyone has been conditioned to accept crisis, resulting in a situation where the event necessary to trigger a collapse has to be more significant or it will just be defined away like the Greek default and everyone will ignore it.  So the situation today is our population is divided into two groups, the people willing to accept that there may be losses from fleeing the system early and purchasing PMs, hoping to make a gain but knowing they are at least preserving their wealth, and the rest of the flock, so ignorant or greedy that they are willing to continue being herded, desperate to make a gain in a sick market and blind to their peril.  If you haven't cashed out, pay attention to the canaries in the coal mine, because nobody can anticipate the collapse (not even Bernanke unless it's the last of the above bullets) 

 

With all the brainpower here, how come we haven't assembled a list of indicators that the system is about to collapse or a new monetary system is about to be announced?  I would welcome such input.

Sun, 12/11/2011 - 09:47 | Link to Comment Sathington Willougby
Sathington Willougby's picture

- bank runs; check (Greece)

- gold account confiscation; check (MF Global)

- bank liquidity crisis; check (Chase offering $125 for $10k savings deposit)

- bank nationalization; check

- oil and gas nationalization; ?

- physical gold confiscation; ramping up - TSA on highways

- repeal of 4th amendment; check

- repeal of 1st amendment; ramping up

- Federal Reserve bank monitoring social media; check

- World War; ramping up

Santa Claus is on his way.

Sun, 12/11/2011 - 13:18 | Link to Comment cristo
cristo's picture

don't worry Burnamke will be out of job by 2012 .The federal reserve was established in 1913 with a 99 year charter wich means that the fed will be dead in 2012 putting Burnamke out of a job . end the F E D in 2012 has always been the plan .

Sun, 12/11/2011 - 00:18 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Well of course BerSkanke lied.
Thats what patalogical liars do.

Sat, 12/10/2011 - 23:33 | Link to Comment cynicalskeptic
cynicalskeptic's picture

We're on the verge of a second American Revolution - but this one will be economically driven, not politically.  

Revolutions that arise from economic causes get vey messy, very fast.  Unemployed hungry people have nothing left to lose.  And even though most such revolutions fail, those responsible - or those perceived to be responsible for the woes suffered by all - often pay with their lives.    A replay of the French or Russian Revolutions will npt be good for anyone.

 Bernanke et al should be far more worried about the general population that's losing their unemployment - with no chance for a job - than the bankers and Wall Street types who somehow continue to collect millions while creating TRILLIONS more of worhtless derivatives.   How many more bets have been placed via CDS on sovreign debt?    AIG was nothing in comaprison to what's going on now......   

Sat, 12/10/2011 - 23:16 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

I'm with the Honey Badger - I don't give a shit, what it is it is - let it all go to hell and if I have to hit the road with a pack on my back, well, it won't be the first time...

Sat, 12/10/2011 - 21:46 | Link to Comment rsnoble
rsnoble's picture

I want the US collapse to happen as fast as possible.  All the talks about marshall law, fema camps etc-------the most people getting fucked all at once would completely overwhelm them and they'd never be able to control it.  That's why they're trying to let this thing down as slow as possible, but there's still a huge cliff below. 

Of course you know our fearless leaders.....they'll stop at nothing.  I say bravo because it's really apparent by looking around the net that the word is definitely out.  So what's in store?  Rally behind nuking Iran?  Any talk of going to war is completely fucking stupid if Russia and China get involved.  Even if we didn't take a direct hit our environment is gone forever.

I didn't use to be a big 2012 conpiracist but I can easily envision the end of mankind.  It's not enough to just survive, someone has to be in charge of it all and filthy rich and if they can't have it all then no one will have anything.  That's how fucking crazy they are.

Sun, 12/11/2011 - 13:19 | Link to Comment cristo
cristo's picture

don't worry Burnamke will be out of job by 2012 .The federal reserve was established in 1913 with a 99 year charter wich means that the fed will be dead in 2012 putting Burnamke out of a job . end the F E D in 2012 has always been the plan .

Sun, 12/11/2011 - 08:11 | Link to Comment Smiddywesson
Smiddywesson's picture

Strategic nukes won't be exchanged on anywhere near as great a level as you seem to think.  They will lob EMPs at each other.  Over 90% of the world's population lives on just 4% of the Earth's surface, shut off their electronics with EMPs and it's game over for most of the population.  The green lobby would love it.

Sat, 12/10/2011 - 22:54 | Link to Comment SumSUN
SumSUN's picture

They will probably get their heads chopped before they can push the button.

Sat, 12/10/2011 - 22:06 | Link to Comment Buck Johnson
Buck Johnson's picture

Your correct, they are trying to control the meltdown but it won't happen.  I also want it to happen instantly and fast, because it would show even the myopic that we where wrong.  The only way the system can get clean is to flush it all down the toilet and clean everything up and change the planets economic model including the US.  If we have another reserve currency that is based on a basket of resources then we would be controlled also in what we can do.

Sun, 12/11/2011 - 08:16 | Link to Comment Smiddywesson
Smiddywesson's picture

That is exactly why you won't get a new reserve currency that is based on a basket of resources, because the people who run things would be limited in gaming the system.   The world runs on gold and silver and oil.  They are not stockpiling oil or silver in anticipation of the collapse and the new monetary system, but they are amassing huge amounts of gold in all the central banks.  They have plenty of experience in managing a gold based system, so that's what you are going to get.  You can forget about a basket of currencies, it's not going to happen.

Sat, 12/10/2011 - 21:46 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

You should replace the word "stabilization" with the word "manipulation" in the "Emergency Economic Stabilization Fund.

Just like the USA "Exchange Stabilization Fund"

Is really "The Exchange Manipulation Fund"

These fucking Quacks have a nice pretty name for eveything corrupt.

Soon the will have "the Death for  Democracy Stabilization Fund.

Sat, 12/10/2011 - 18:49 | Link to Comment MrBinkeyWhat
MrBinkeyWhat's picture

Wait now...so TPTB print up some "money" to pay out the "money" that they "lost" by creating "money", and the only suckers that "lose" are the actual productive tax mules? DUH!!! No brainer! Take that up your ass sheeple.

Bitchez! //sarc?

Sat, 12/10/2011 - 19:11 | Link to Comment nmewn
nmewn's picture

Bitchez! //sarc?

Not sarcasm.

You've stumbled upon "it". "It" being truth.

The Siren Call. The elitist seduction to do great things with limitless amounts of "money". Which is used for both war & welfare.

What they never explain (in their dreamy voices) is your enslavement to them. You are trapped. Transfixed. Paralyzed. To move away toward freedom breaks the spell. To stay can be comfortable but never really pleasing.

Just listen to their melody ;-)

Sat, 12/10/2011 - 18:16 | Link to Comment G-R-U-N-T
G-R-U-N-T's picture

"Lots o'thieves" indeed, however there is always one "Big Daddy" thief that keeps the top spinning among thieve's.

Who is keeping the "clubs and pitchfork public" away from the banksters?

 

 

Sat, 12/10/2011 - 17:51 | Link to Comment DrunkenMonkey
DrunkenMonkey's picture

Excellent (and very perceptive) analysis of what was said and, more importantly, what was not said.

Sat, 12/10/2011 - 18:11 | Link to Comment RockyRacoon
RockyRacoon's picture

Fat lotta good it's all going to do.   Too many sharks in the water to matter at this point.

Sat, 12/10/2011 - 17:46 | Link to Comment woggie
woggie's picture

the fed, in all it's iterations, must always, ultimately, go to the plebeian well (wallet); time 4 some poison?

Sat, 12/10/2011 - 16:19 | Link to Comment YesWeKahn
YesWeKahn's picture

Bernank did all that for the benefit of the congress.

Sat, 12/10/2011 - 15:22 | Link to Comment Kayman
Kayman's picture

I fail to see how an American Central Bank, that once had the world's largest Creditor Nation and Productive society to back it, will be able to keep the top spinning, with the world's largest Debtor nation and increasingly unproductive society as its backstop.

The Fed is one keystoke away from unravelling everyday.  Conjuring does not replace hard work. The magic of money relies on trust... long disappeared.

Too many riders, not enough horses.

Sun, 12/11/2011 - 13:20 | Link to Comment cristo
cristo's picture

don't worry Burnamke will be out of job by 2012 .The federal reserve was established in 1913 with a 99 year charter wich means that the fed will be dead in 2012 putting Burnamke out of a job . end the F E D in 2012 has always been the plan .

Sat, 12/10/2011 - 16:56 | Link to Comment blindman
blindman's picture

http://www.youtube.com/watch?v=rCu3fpg83TY
Money As Debt II-Promises Unleashed-Full Length Documentary

Sat, 12/10/2011 - 16:16 | Link to Comment Mr. Lucky
Mr. Lucky's picture

It must have been his "state of mind."

Sat, 12/10/2011 - 14:54 | Link to Comment Sufiy
Sufiy's picture


US Dollar: Mess continued: The Federal Reserve is a Private Bank

We need to have fun from time to time, this movie will make you laugh...by the way the Hybrids are introduced there in a special way as well...In our quest for the investment trends and underlining economic and financial trends understanding of the US monetary system is the key. We hope that by now not a lot of people will be totally shocked to find out that Federal Reserve is as federal as Federal Express. Have a fun and if you would like to dig deeper you are welcome to the links below. You can always decide where is fiction and where is truth and what is good for your money.

 


Executive Order 11110 From Wikipedia, the free encyclopedia Executive Order 11110 was issued by U.S. President John F. Kennedy on June 4, 1963. This executive order delegated to the Secretary of the Treasury the president's authority to issue silver certificates under the Thomas Amendment of the Agricultural Adjustment Act. http://sufiy.blogspot.com/2011/02/us-dollar-mess-continued-federal.html#

Sat, 12/10/2011 - 21:58 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

JFK's Executive Order 11110 ended up being the beginning of the END for him.

They took the copper from my penny

The Silver from my dime

The Nickel from my Nickel

Makes me sicker

All the time.

Anyone see a pattern here...?

Chords-G D C

Sat, 12/10/2011 - 14:44 | Link to Comment marathonman
marathonman's picture

The Mafia is more tranparent and honest than the Fed.  

Sat, 12/10/2011 - 14:44 | Link to Comment Ol Man
Ol Man's picture

[Leo Getz explaining money laundering]
 Okay, okay, okay, okay, this is the best part okay? You make a tax deduction on interest payments you don't even make! Am I an innovator? Am I a genius?

 

That'll about cover the Fly-Bys...

 

Snicker...

;)

Sat, 12/10/2011 - 14:37 | Link to Comment JR
JR's picture

Being practical, I fear that what will emerge from the populist anti-Fed sentiment might be worse than the present situation. –Economic Policy Journal

Being practical, then, what’s needed is to replace Bernanke with a better liar?

We’ve arrived at this juncture by continually accepting the tyranny on the mythical conclusion that it could always be worse. Everything our Founders feared of a central bank has come true – and we still wonder if we can live with it.

Sat, 12/10/2011 - 14:38 | Link to Comment Georgesblog
Georgesblog's picture

The contents in official statements are always deceptive by omission. These statements that everything was open and complete are perjury. Of course, we know that changing the meaning of words to fit the current situation is standard procedure for a liar.

 http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Sat, 12/10/2011 - 14:31 | Link to Comment tony bonn
tony bonn's picture

bernanke is not the chairsatan of the fed for nought....he is like his father - the father of lies and murder....

it is that 2t usd feculent conglomeration of junk on the fed's balance sheet which will guarantee qe ad infitum ad nausum world without end....

fuck the fed and the chairsatan....

Sat, 12/10/2011 - 14:16 | Link to Comment JR
JR's picture

Jim Willie expands on the DECEPTION IN REPORTING in his article Perpetual Q.E.:

“Move on to the grand deceptions in reporting by the dullard devoted financial press and the USGovt lackeys. They would make Orwell proud, even Goebbels. Consider the many transformations in definition. Insolvency, intervention, and decay are called instability, lack of confidence, and volatility. Fraud is called the misfortune of the crisis. Theft is called missing money. The amounts are greatly exaggerated on the low side. The Madoff Fund stole $150 billion, triple the officially stated amount. The systemic failure is called the global financial crisis. The crumbling monetary system is called the sovereign debt crisis. The omnipresent Goldman Sachs lieutenants, none elected, are called the banking commissioner technocrats. The dead banks are called the distressed banks. The bank welfare is called bank aid. An observer truly requires a game program, a playbill stage flyer, in order to read through the deception and correctly see the destruction. It is total. They even went so far as to claim gold investments aid the terrorists. Next we could see a major financial firm go bust and 100 thousand brokerage accounts will go missing.

“MFGlobal is just the start of the final grand theft chapter, whose deception is as great as its theft…”

http://www.marketoracle.co.uk/Article31845.html

Sat, 12/10/2011 - 14:11 | Link to Comment Zero Govt
Zero Govt's picture

Bernanke is toast ...his governance is the most complete record of incompetent economic policy direction and the most corrupt and destructive money management that contributed greatly to Americas rotten bankrupt criminal regime

the toady is a crook

bring the rope

Sat, 12/10/2011 - 13:57 | Link to Comment non_anon
non_anon's picture

they both lie, so they believe each other

Sun, 12/11/2011 - 18:21 | Link to Comment green888
green888's picture

Half a truth is better than no politics. The system allows some to lie, and all of them to believe those lies

Sat, 12/10/2011 - 13:51 | Link to Comment buzlightening
buzlightening's picture

One giant skunk works factory, having each and every criminal sniff each others bung hole and proclaiming it don't stink.  From the western bankstering cooks of the dead head feds to unrepresntation of CONgress & the SINate.  We the people are getting jiffy lubed are every turn by a crinally syndicated mob coast to roast.  Why wouldn't it all come falling down as the corrupted pile of shit it is.  No one need be surprised just prepared!!

Then we take everyone from mofo globalls to all the other dead head feds, who simply are losing we the people monies and the these simply lose their heads. 

Sat, 12/10/2011 - 13:50 | Link to Comment topcallingtroll
topcallingtroll's picture

Keep it up.

Even if we continue down the path of financial feudalism with bribes to the poor to keep them quiet, there is a chance for individual liberty, personal responsibility, and meritocracy to return.

Probably after the next revolution.

Get ready some day to lock and load

Sat, 12/10/2011 - 13:47 | Link to Comment falak pema
falak pema's picture

saying that to congress is like saying to a harem eunuch, "we expect you to treat some of the frustrated, bickering  slave women in your charge as a man, do your part, satisfy them. Wishful thinking...

Sat, 12/10/2011 - 13:19 | Link to Comment Mark123
Mark123's picture

Bloomberg criticizing the mother bank....how cute.  Manufactured consent.

 

America was founded to escape the bonds on European bankers.  That did not last long.

Sat, 12/10/2011 - 13:34 | Link to Comment JR
JR's picture

Exactly. Bloomberg is part of the food chain.

Sat, 12/10/2011 - 13:14 | Link to Comment El Gordo
El Gordo's picture

Pay no attention to that man behind the screen.....

Sat, 12/10/2011 - 13:07 | Link to Comment max2205
max2205's picture

Why on earth do you think CONgress gives a shit?!

Sat, 12/10/2011 - 13:42 | Link to Comment Uchtdorf
Uchtdorf's picture

Exactly. A few hundred of them have been at one time or another a co-sponsor of one of Ron Paul's audit/end the Fed bills, but there have always been turncoats and traitors unwilling to risk everything to save the country from the Fed. We need the sheeple to wean themselves of frivolous matters and pay attention. Not likely to happen until things get worse, lots worse. Even then the liars in DC will probably not vote the right way.

Sun, 12/11/2011 - 15:31 | Link to Comment flattrader
flattrader's picture

And then there's this--

A select few of them attempt to prohibit Congressional stock trading on non-public information and Tea Party darling Eric Cantor says "No."

Fuck these people.

Why Is Eric Cantor Blocking the Congressional Insider Trading Act? http://finance.yahoo.com/news/why-eric-cantor-blocking-congressional-184...
Sat, 12/10/2011 - 13:18 | Link to Comment Jumbotron
Jumbotron's picture

They would have to first know something of finance and the Federal Reserve in order to give a shit.

Even then.....it would be questionable if they would.

Sat, 12/10/2011 - 13:16 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

Exactly.  They love smoke and mirrors, too.

Sat, 12/10/2011 - 14:20 | Link to Comment Rainman
Rainman's picture

.....yes, especially when smoke and mirrors cover up their own irresponsibility, kickbacks and general malfeasance with the public's deficit financed treasury.

Sat, 12/10/2011 - 13:02 | Link to Comment Manthong
Manthong's picture

What do you expect when you have unlimited use of other peoples money and no risk.

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