Eliot Spitzer: The Federal Reserve is a Ponzi Scheme

The Raw Story

The Federal Reserve — the quasi-autonomous body that controls the US’s money supply — is a “Ponzi scheme” that created “bubble after bubble” in the US economy and needs to

be held accountable for its actions, says Eliot Spitzer, the former governor and attorney-general of New York.

In a wide-ranging discussion of the bank bailouts on MSNBC’s Morning Meeting, host Dylan Ratigan described the process by which the Federal Reserve exchanged $13.9 trillion of bad bank debt for cash that it gave to the struggling banks.

Spitzer — who built a reputation as “the Sheriff of Wall Street” for his zealous prosecutions of corporate crime as New York’s attorney-general and then resigned as the state’s governor over revelations he had paid for prostitutes — seemed to agree with Ratigan that the bank bailout amounts to “America’s greatest theft and cover-up ever.”

Advocating in favor of a House bill to audit the Federal Reserve, Spitzer said: “The Federal Reserve has benefited for decades from the notion that it is quasi-autonomous, it’s supposed to be independent. Let me tell you a dirty secret: The Fed has done an absolutely disastrous job since [former Fed Chairman] Paul Volcker left.

“The reality is the Fed has blown it. Time and time again, they blew it. Bubble after bubble, they failed to understand what they were doing to the economy.

“The most poignant example for me is the AIG bailout, where they gave tens of billions of dollars that went right through — conduit payments — to the investment banks that are now solvent. We [taxpayers] didn’t get stock in those banks, they didn’t ask what was going on — this begs and cries out for hard, tough examination.

“You look at the governing structure of the New York [Federal Reserve], it was run by the very banks that got the money. This is a Ponzi scheme, an inside job. It is outrageous, it is time for Congress to say enough of this. And to give them more power now is crazy.

“The Fed needs to be examined carefully.”

I must differ with Mr Spitzer on one point.  I doubt the Fed “failed to understand what they were doing to the economy,” I think they knew exactly what they were doing — looting this country’s treasury.

Other than that, I agree completely.  The Federal Reserve needs an independent audit ASAP.  Do I have any illusions that it will happen?  Not many.

Be careful, Mr Spitzer…

4 thoughts on “Eliot Spitzer: The Federal Reserve is a Ponzi Scheme

  1. It’s too bad that, despite years of insider knowledge of what goes on within the Fed, because Spitzer got caught paying for pussy, no one will listen to him.

    The Fed has long been a target of the rightwing conspiracy theorists, along with the Freemasons, Skull and Bones, the Bilderberg Group, etc. after watching Ben Bernanke bob and weave his way through interview after interview, it certainly appears that transparency is not something he’d ever embrace.

    • You’re absolutely right, Mom.

      Every time Spitzer opens his mouth, someone screams, “He fucked hookers!”

      I was going to say something like that on this post, but I didn’t feel like I should join the chorus.

  2. If I were inclined to be fair, Zooey, I’d admit that I can’t mention Vitters without including Pampers or Craig without toe tapping.

    But fairness isn’t my inclination today, and what Spitzer has to say affects all of us greatly.

  3. The Senate companion bill S 604, is sponsored by none other than Bernie Sanders. Since Ron Paul’s House version has 276 co-sponsors, and Bernie’s has only 19, will the bill have a much tougher time passing in the Senate, where the lobbyists are focusing all their attention on currying favor for big business?

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