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…

30% Spike In Foreclosure Filings

Now that the temporary suspension of foreclosure filings has been lifted by some of the banks, February saw a dramatic increase to the tune of 290,000 property foreclosures.  Chase is set to lift their moratorium on Friday.

That total, a roughly 6% increase from January, was the third-highest monthly total – following those in August and December 2008 – since the foreclosure-listing service’s report was launched in early 2005.

After a 45-day voluntary moratorium in Florida ended at the end of January, foreclosure activity increased 14% from a month earlier, RealtyTrac said. Many New York proceedings delayed by a 90-day extension appear to have hit the system in February, boosting foreclosure activity by 23%, the report said.

The two hardest hit cities are Las Vegas and Cape Coral-Fort Myers, Florida.  Las Vegas saw one in every 60 properties and the Fort Myers area had one in every 65 units get hit with a foreclosure notice.

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Bamboozled, conned, hoodwinked, hornswoggled..

.. there are many words for what’s being done here.

What happened is: American taxpayers were swindled out of a huge chunk of money and the Fed doesn’t like answering questions. Bloomberg reports:

The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.(Read full article)

Bloomberg met with all kinds of resistance from the Fed which basically claims giving out details would make the financial crisis even badder. The Financial system was based upon trust they say. Trust. What trust?

So, they are throwing out trillions of dollars like ticker tape on a parade, but since the dollars are your dollars you are not allowed to know any details. Continue reading

Bailout costs $8.5 trillion

Enough to make your eyes glaze over…

The Real News Network:

US Federal Government has pledged $8.56 trillion in economic bailout for financial institutions so far

With the credit crisis continuing to worsen, the US federal government is pledging a seemingly endless amount of money to shore up failing institutions hit hard by toxic assets. Federal government pledges now top $8 trillion with the most recent $800 billion announced Tuesday. The Real News Network spoke to journalist and author Nomi Prins.

Show me the money…

At least show me where it’s going..

So, what is happening to our taxpayer dollars?  Is someone raiding the coffers before certain people leave office? Is anyone paying attention?

Truthout: A Quiet Windfall for US Banks

With attention on bailout debate, Treasury made change to tax policy.

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration’s request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention. 

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion..

And then there is THIS from Bloomberg:

The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

Where IS all this money going? And who is benefitting? Will this silent, near-invisible hemorrhaging of taxpayer funds disappearing before President Obama can take office in January affect his ability to deal with this growing national financial crisis?

It sure feels like the foxes are in the henhouse.. and they are having a hearty feast.