Bernanke's Former Advisor: "People Would Be Stunned To Know The Extent To Which The Fed Is Privately Owned"

Tyler Durden's picture

With every passing day, the Fed is slowly but surely losing the game.

Only it is not just former (and in some cases current) Fed presidents admitting central banks are increasingly powerless to boost the global economy, even if they still have sway over capital markets. What is far more insidious to the Fed's waning credibility is when former economists affiliated with the Fed start repeating mantras that until recently were only a prominent feature in the so-called fringe media.

This is precisely what happened today when former central bank staffer and Dartmouth College economics professor Andrew Levin, special adviser to then Fed Chairman Ben Bernanke between 2010 to 2012, joined with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more transparent and accountable to the public.

Levin is pressing for the overhaul with Fed Up coalition activists. Many of the proposed changes target the 12 regional Federal Reserve Banks, which are quasi-private and technically owned by commercial banks in their respective districts.

All of that is not surprising. What he said to justify his new found cause, however, is.

"A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan. He described his proposals as "sensible, pragmatic and nonpartisan."

Why is that stunning? Because it has long been a bone of contention if only among the fringe media, that at its core the Fed is merely a private institution, beholden only to its de facto owners: not the people of the U.S. but to a small cabal of banks. Worse, the actual org chart of who owns what is not disclosed, even as the vast majority of the U.S. population remains deluded that the Fed is a publicly owned institution.

As the WSJ goes on to note, the former central bank staffer said he sees his ideas as designed to maintain the virtues the central bank already brings to the table. They aren’t targeted at changing how policy is conducted today. “What’s important here is that reform to the Federal Reserve can last for 100 years, not just the near term,” he said.

And this is coming from a former Fed employee and Ben Bernanke's personal advisor! That in itself is a most striking development, because now that the insiders are finally speaking up, it will be a race among both current and prior Fed workers to reveal as much dirty laundry as possible ahead of what is increasingly being perceived by many as the Fed's demise.

To be sure, Levin's personal campaign for Fed transformation will not be easy, and as the WSJ writes, what is being sought by Mr. Levin and the activists is significant and would require congressional action. Ady Barkan, who leads the Fed Up campaign, said the Fed’s current structure “is an embarrassment to America” and Fed leaders haven’t been “willing or able” to make changes.

Specifically, Levin wants the 12 regional Fed banks to be brought fully into the government. He also wants the process of selecting new bank presidents—they are key regulators and contributors in setting interest-rate policy—opened up more fully to public input, as well as term limits for Fed officials.

This would represent a revolution to the internal staffing of the Fed, which will no longer be at the mercy of its now-defunct shareholders, America's commercial banks; it would also mean that Goldman Sachs would lose all its leverage as the world's biggest central bank incubator, a revolving door relationship which has allowed the Manhattan firm to dominate the world of finance for the decades.

Levin’s proposal was made in conjunction with the Center for Popular Democracy’s Fed Up coalition, a group that has been pressuring the central bank for more accountability for some time. The left-leaning group has been critical of the structure of the regional banks, and has been pressing the Fed to hold off on raising rates in a bid to make sure the recovery is enjoyed not just by the wealthy, in their view.

The proposal was revealed on a conference call that also included a representative from Bernie Sanders’s presidential campaign, although all campaigns were invited to participate.

The WSJ adds that according to Levin, who knows the Fed's operating structure intimately, says the members of the regional Fed bank boards of directors, the majority of whom are selected by the private banks with the approval of the Washington-based governors, should be chosen differently. The professor says director slots now reserved for financial professionals regulated by the Fed should be eliminated, and that directors who oversee and advise the regional banks should be selected in a public process involving the Washington governors and local elected officials. These directors also should better represent the diversity of the U.S.

Levin also wants formal public input into the selection of new bank presidents, with candidates’ names known publicly and a process that allows for public comment in a way that doesn’t now exist. The professor also wants all Fed officials to serve for single seven-year terms, which would give them the needed distance from the political process while eliminating situations where some policy makers stay at the bank for decades. Alan Greenspan, for example, was Fed chairman from 1987 to 2006.

As the WSJ conveniently adds, the selection of regional bank presidents has become a hot-button issue. Currently, the leaders of the New York, Philadelphia, Dallas and Minneapolis Fed banks are helmed by men who formerly worked for or had close connections to investment bank Goldman Sachs.

Levin called for watchdog agency the Government Accountability Office to annually review and report on Fed operations, including the regional Fed banks. He also wants the regional Fed banks to be covered under the Freedom of Information Act. A regular annual review hopefully would insulate the effort from perceptions of political interference, Mr. Levin said.

* * *

While ending the Fed may still seem like a pipe dream, at least until the market's next major crash at which point the population may  finally turn on the culprit behind America's serial boom-bust culture, the U.S. central bank, Levin's proposal would get to the heart of the most insidious conflict of interest in the US: the fact that the Federal Reserve works not for the people of America, but for its owners - the banks.

Which is also why, sadly, this proposal will be dead on arrival, as its passage would represent the biggest loss for Wall Street in the past 103 years, far more significant than anything Dodd-Frank could hope to accomplish.

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Tinky's picture

The lifeboats are filling up with rats awfully quickly...

Mr Pink's picture

I need to send this article to Stefan Molyneux so he will stop arguing with me

clymer's picture

wha? "..to the extent that it's privately owned.."

It's fucking privately owned. Even this article insinuates that it's a quasi public / private institution. The profits are private. The losses are public. That's WORSE than "privately owned". GAAAAAD people are dumb

 

chicaboomboom's picture
chicaboomboom (not verified) clymer Apr 11, 2016 9:31 PM

THEY OWN the FED >> https://goo.gl/bFYusM

philipat's picture

The only real debate is how much of the Fed is held by foreigners (Rothschilds), which seems to be the US's most closely guarded secret, even more secret than its Gold "reserves"..

NoDebt's picture

Hey, let's take the corrupt Fed and put it FULLY in the hands of the even more corrupt government.  Because let's face it, the government is the only institution we can trust to "do the will of the people".

Oh, my God, we're so fucking screwed.  This is the FIX for the problem?  Why don't you just pour sugar in my gas tank while you anally rape my grandmother and we'll call it even.

I can't remember who it is on ZH who always says "Roll the guillotines.  Until then, nothing changes," but I'm starting to think he might ultimately be proven the smartest person on the board.

 

zeronetwork's picture

Owning the FED is not the issue. Issue is that money changer occupied financial institutions which ever country they moved in. Open up history books and you will know this is nothing new and end results are no surprise either.

fleur de lis's picture

People would be even more stunned to find out the extent the Fed abused our tax money to plan and manage both World Wars, Bolshevik and other commie revolutions, and assorted civil wars worldwide.

Pinto Currency's picture

 

 

All government and central banks are fully captured by the same bankers.

It's not just the Fed.

RaceToTheBottom's picture

Two sides of the same coin:

1)  The Gov cannot deficit spend without the Banksters

2)  The Banksters cannot skim risk free profits via printed money without the authorization of the .gov.

 

They are a two headed monster.  You need to kill both heads.

Four chan's picture

everyone on here should check out some eustace mullins videos

 

https://www.youtube.com/watch?v=Ul3Iyq1i_30

Tarzan's picture

The end must be near,

"The Fed “should be a fully public institution just like every other central bank” in the developed world"

when they pretend to grow a conscience, and seek to give control back to Congress, the ship is sinking and the rats want out.

Now that they've sucked all the blood from the Fed and left it in tatters, they seek to offload the carcass before the creditors come knocking.

Thanks, but FUCK YOU FED!

The American People should demand we have a full audit of the Fed and default on everything not accounted for, and everything not authorized lawfully. China, Japan and the rest can pound sand for all I care. Let them go after the current owners of the Fed and their cronies!

Pairadimes's picture

This is just putting lipstick on a Tyrannosaurus Rex. End the Fed. 

Four chan's picture

may the next central bank be owned by the people for we the people, unlike the current farcical criminal organization. 

DownWithYogaPants's picture

Obviously it would not be an improvement to demand more academics to replace people from industry. 

The most obvious first step would be a gold & silver value backed currency.  But since they probably killed Kennedy over this I'm thinking the guillotine option may be sole end game.  I won't call it a solution because obviously we all know what a fiasco the French revolution was.  Imagine the French revolution only run by Wogs.   Suspect that is even more hairy.

SafelyGraze's picture

keep it privately-owned until all the wealth has been extracted from the public.

*then* you can make it be publicly owned.

hugs,
the nations of south america 

Theosebes Goodfellow's picture

If it wasn't all so fucking insane it would be laughable. Goldman Sachs gets levied a FIVE BILLION DOLLAR fine for FRAUD and no one goes to jail? As you shitting me? And what pray tell is Goldman Sach part of? The Federal Reserve. The fox guards the henhouse. Only the funny money debt they pass out and print at whim is losing its value fast, and printing more won't change a thing.What's even funnier is that if there ever was a run on the banks, (and the Fed), there isn't enough paper currency to cover all the zeros and ones, so the worthless paper would actually become worth something, (assuming you had any), but only for a very, very short time. Then it would be treated just like the Venezuelan Bolivar is today, since there seems to be an acute shortage of toilet paper there these days.

They will next try to see if the saps will swallow the NIRP idea so that the cartel can screw everybody both coming and going. And think of just how pissed the rest of the world will be seeing as they will be holding worthless T-bills.  It's a lot harder to wipe your ass much with those I hear. They just don't go as far. It's a problem with large denomination bills they say.

So then comes the IMF. Same jokers, same game but with a shiny new currency based on the SDR. Adios, US greenback, hello New World Order. Say, what is in your safe?

Chris Dakota's picture
Chris Dakota (not verified) Theosebes Goodfellow Apr 12, 2016 7:54 AM

People know the FED is private.

Ron Paul educated us on this back in 2007 to 2012.

 

TuPhat's picture

Levin is just another bankster monster.  If he wanted things to change he would tell us who owns the FED not just throw out hints.

pods's picture

Putting on my conspiracy hat, there is no better time for the FED to go public. It is stuffed full of rotten MBSs and T bills.

I would not put it past those who control the FED to sell it back to the people, walk away, and promptly use their media to push for the SDR and start the whole fucking thing over on an international scale.

But that's just me, I'm a nut.

pods

JRobby's picture

I am not "stunned" at all. The FED's moves have always been for the benefit of it's oligarch owners most of which are controlled by a very small group.

One of the great PR / MISDIRECTIONS of all recorded history. But it was brought to you by the folks that re-wrote the Bible after all!

https://biblicisminstitute.wordpress.com/2015/07/28/how-the-ashkenazi-je...

HopefulCynical's picture

The Fed “should be a fully public institution just like every other central bank” in the developed world...

Every other central bank is owned by the same bunch of parasites who own the Fed - with Rothchild sitting at the head of the table.

Dave Thomas's picture

The Goy Know, SHUT. IT. DOWN.

Mr. Universe's picture

To replace it? United States Federal Digital Credits! All government transactions from this day forward will require registration and chipping so you can receive your EBT, Social Security, Disability, unemployment...etc. etc.. benefits. Oh have they got a plan for us.

xavi1951's picture

Take a corrupt private institution and convert it to a public institution and it will be even more corrupt.  The parties will clammor for control and it will end in a disaster for the people. 

Took Red Pill's picture

People know the FED is private.Ron Paul educated us on this back in 2007 to 2012." People on ZH know. You'd be surprised how ignorant most Americans are!

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

Henry Ford.

Still true today!

http://www.globalresearch.ca/most-americans-dont-know-that-the-federal-r...

DaveyJones's picture

Thanks for bringing up the Goldman settlement

Such a fucking Joke

beemasters's picture

End the Fed or nationalize the private banks....especially Goldman Sachs.

All Risk No Reward's picture

**Control** is what matters, not ownership.  Rockefeller said he wanted to own nothing BUT CONTROL EVERYTHING.

Got that, little people?  Start thinking like a dElite and everything falls into place.

That phony little article claiming that LBJ bullied the poor banker wankers at the Fed - that's PROGRAMMING YOUR MIND so that you are misled into thinking that the government is sovereign.  They aren't.

The Money Power, the Debt-Money Monopolists, are the sovereigns.  They buy politicians like you buy a gardener.  The buck doesn't stop at the Presidency, it stops at the MONEY POWER!

detached.amusement's picture

more likely it was lbj jacked up against the wall

Manthong's picture

Let’s see, Goldman Sacks, JPM, BoA, Roth Scild, Rockefeller, Carnegie, et al.

I’m shocked, just shocked to hear there is Oligarching going in here.

Debt-Is-Not-Money's picture

"All government and central banks are fully captured by the same bankers.
It's not just the Fed."

https://vidrebel.wordpress.com/2016/01/18/how-bad-can-2016-get/

"I would prefer to arrest the Bankers and to seize their assets to fund Debt Cancellation. And I would want to issue a non-interest bearing currency like Lincoln’e Greenbacks and combine that with a repeal of fractional reserve banking."

SuperRay's picture

More ass covering.  Levin may have had a change of heart, in which case he should be able to provide TONS of specific information due to his insider status.  If he's just involved with this group, he may just be seeing the pitchforks coming (more like AR-15's) and has chosen sides.  Paging City of London....

Ghordius's picture

"who the owners of the FED are is not the issue"

ok, let's compare. I know, it goes against the grain of exceptionalism to compare, but I am a foreigner, so I do it

the Bank of England used to be the monetary hegemon of the world. and it was owned and directed by... Rothschild

then the British Government nationalized the BoE after WWII. it is now a National Bank

for Rothschild, the question of who is the owner of the Bank of England was the issue, and very much so

Unknown User's picture

The problem is the Fractional Reserve scam. Nationalizing the means to enable this scam will only make the problem more permanent. 

Diplodicus Rex's picture

Geordie,

I understand the propaganda would have it that the BoE has been nationalised but if you look beyond the propaganda at their actions rather than their words a different picture appears.  If the BoE was truly a national bank why would the government pay interest on a loan from the BoE? Why would the BoE engage in QE which knowingly impoverishes the population to the benefit of the commercial banks? Why would you have an ex-member of Goldman Sucks running the BoE if it was a national bank? I think their actions speak far louder than their words. The BoE is no more national than the Federal Reserve, despite the propaganda which would have you believe otherwise.

Ghordius's picture

government. you said it. well, what exactly forbids the UK government... to be friendly to certain groups? a law? and Act of Parliament?

we are talking about the Tory cabinet headed by Cameron, aren't we? well, where is their love for the have-nots? where is their... distaste for the banking industry on Blighty?

look, it's simple: England is a country where homeowners love as much as bankers the FIRE economy. and they vote... Tory

what do you expect from them? a strong Pound?

wren's picture

From this point on the Federal Reserve needs to be referred to as The Iron Bank of Braavos.

"One stone crumbles and another takes its place and the temple holds its form for a thousand years or more. And that's what the Iron Bank is, a temple. We all live in its shadow and almost none of us know it. You can't run from them, you can't cheat them, you can't sway them with excuses. If you owe them money and you don't want to crumble yourself, you pay it back."?Tywin Lannister

Our politicians passed this legislation allowing a private institution to create money and lend it to the federal government at interest. These days this money is created digitally and doesn't even cost for the paper or ink. Our politicians, in this one act sold our grandparents, our parents, us, our kids, their kids and their kids into slavery. This has been the source of global conflicts, it has caused more death in our century than religion.

Executive Order 11110 by Kenedy needs to go back in play. If a private institution is digitally creating money, they shouldn't be allowed to charge us, our children, their children and their children interest on something it takes them zero effort to create.

And Article 1, Section 8, clearly states that it is the responsibility of the federal government to coin money. One would think that a deviation from the Constitution to pass off this responsibility to a private institution would require a constitutional amendment. But what is the Constitution anyway but a silly, outdated piece of paper.

Dave Whiteman's picture

Heads we win, tails we lose.

Beowulf55's picture

Heads we lose, tails we lose

 

There....fixed it for ya.

the_narrator's picture

The Chinese government is capable of printing their own money and using it productively for development goals.  I think the Chinese rise is an interesting challenge to the privately controlled central bank paradigm.  

I am constantly amused by the lack of "the big crash" in China because it doesn't have the built-in boom/bust dynamic that the western monetary systems have. 

sessinpo's picture

Every system has its boom bust cycle and they have theirs. As for history, the various dynasties have come and gone sometimes with those cycles.

What many do not seem to understand, that even with  "sound" money such as one backed by some commodity, the boom bust cycle still occurs. That has yet to be addressed. No one has a cause or solution to it. Some  suggest such cycles occur because of the human dynamic that is involved. For example, emotions such as greed and fear.

goldsansstandard's picture

There are boom bust cycles in such things as snow shovels in December vs. July.
However, a boom and bust in the whole freakin world is another matter.
TheI suggest you avail yourself. Of some Mises, or Rothbard.
The boom bust cycle is spawned out of credit expansion of the money supply.

There is only one commodity that is immune from changes in supply over the centuries. That is gold. The supply of gold has increased at the rate of one and a half percent a year for centuries.

Fake money created through credit, induces booms as the credit expands and busts as the credit and the attached money disappear.

The bullshit that booms and busts are of mysterious origin fundamental to the evil nature of capitalism is the voodoo excuse for an explain action. It offers no fundamental insight into it's mechanism, it just is.
On the other hand the Austrian theory is based on the logic of human action.

When Austrian policies left over from classic liberal economics were used to fight the bust of 1920 21 , the inflationary boom of the First World War was cleared in a single. Year.
The initial crash of 20 was 120 to 66 on the Dow A little worse than 2008. The Fed did a surprise rate increase of one and a half percent to seven percent right into the teeth of the downturn. the Feds were out of the picture due to Wilsons stroke, and Hardings philosophy.

the suffering was over in less than a year for. Most of the affected.
I am sorry, but I just can't let the Keynesian dribble pass.

How many more millions will Keynes kill in the long run?
Caveat, blind guy typing , editing not possible , yet.

shovelhead's picture

For a blind guy, you see pretty clearly.

Just as there are seasonal cycles in consumer purchases, there are also trends in business expansion and contractions based on the cost of borrowing. This price signaling is important to businesses to know whether to forgo or engage in long term capital investment. With an interest rate set only by market forces using only savers money instead of false credit creation can the true price of credit be discovered.

Fractional reserve lending and rate supression renders a destabilizing effect on the economy by sending false price signals and malinvestment which in turn create a whipsaw boom-bust cycle rather than a gentle natural ebb and flow of time preferences.

The difference between tossing a pea in a pond vs. a cinderblock.

Your neighbors should be setting interest rates by their savings rather than private bankers in collusion with the Govt. monopoly power.

It's quite clear they are monkeys fucking a football that they stole from the public.

After all, it's our money. We're the guys and gals that go out everyday to make it. Without our efforts there would be no money at all.

People should remember that.

wren's picture

Sessinpo, this may be true, but we should not be slaves to a private institution by giving them the responsibility to coin money and not suffer audits. Boy I wish Congress gave me the responsibility of creating money for free and lending it at interest. And your client, the leading nation in the free world! The nation with the highest level of spending of any nation on the planet, the highest level of debt, and the bank has us by the balls charging us interest.

Burn the bank down and do it when Congress is invited over for a potluck.

Kirk2NCC1701's picture

"Roll the guillotines.  Until then, nothing changes,"

What said it, you ask?  That would be LoP.  Bless him for his clarity, accuracy and conciseness.  Although his suggested solution is far to swift and painless, when balanced against the crimes.  A "Mussolini Pinata"** would be more just and appropriate, IMO.

** A term I coined here.

Implied Violins's picture

Actually, ChrisH or something like that said that often too. Sadly, he got woodchipped. Haven't seen him in nearly a year.

shovelhead's picture

That worked out real well for the French, huh?

I don't know why everybody would want to let these pricks off that easy.

After a week of hard labor out of a 20 year stretch at the Merton J. Shovelhead Reform Farm, they would be begging for the guillotine.

"Here's your scissors. I want those 25 acres of grass looking like a billiard table."

"Yassir, Boss."