The US Federal Reserve Board has been caught red-handed in an effort to dump its massive (and toxic) liabilities onto the US taxpayer without either the consent or awareness of the US Congress and the American people. The Fed absorbed all kinds of dubious “investments” into its portfolio during the various bailouts of Wall Street and the banking system. Since the Fed is a private bank, not a federal agency, this raised doubts about the solvency of the Federal Reserve Board itself.
The Fed is now apparently trying to ensure its own solvency by secretly dumping its toxic and risky “investment” paper onto the books of the US Treasury, a “real” federal agency. Is the Fed trying to dupe the entire US Congress (and perhaps the entire Federal Government) by doing this via “a little notice accounting change” (see first link from CNBC). The CNBC report states the Fed’s secretive action was “tucked quietly into the Fed’s weekly report on its balance sheet and phrased in such technical terms” that market analysts have only “slowly begun” to grasp what the Fed is trying to do. The story also notes the Fed is trying to transfer its “substantial losses” to the US Treasury (and via the Treasury to the US taxpayers). It seems evident that the Fed never wanted its secretive action to ever be made known to the Congress or the American people. Kudos to CNBC for publicizing this story.
Is the Fed’s action legal? I’m not a lawyer, but I cannot imagine how this can be legal. As I recall, it is the US Congress that is empowered by the US Constitution to incur debts in behalf of the nation. The Fed has no Constitutional standing at all, much less any Constitutional power to vastly (and secretly) increase the indebtedness or financial risks of the United States of America by dumping toxic assets onto the nation’s books which may later be “bailed out” by a Treasury Deptartment action instead of via any act of Congress. It also seems evident that the Fed did not want the US Congress to know about this action.
If this presumptuous and clandestine action by the Fed to save itself at the nation’s expense is allowed to stand unreversed by Congress, it is my opinion that the Federal Reserve Board is now literally “running the nation” and that it has effectively engineered a “hostile takeover” of the United States Government. Congress needs to very quickly check to see if the Fed’s secret action was permitted under the little-understood “emergency powers” approved by Congress in the Bush administration when then-Secretary Paulson strong-armed the Congress into transferring some (or all?) of its legislative financial powers to the executive branch (i.e. the US Treasury Secretary). Treasury Secretary Paulson, who pressured Congress into giving up many of its powers to Paulson, was a top official of Goldman Sachs, as a previous post on this blog documented. Another previous post cited media articles that so many Goldman Sachs’ executives have permeated the halls of power within the US Treasury and related US government agencies that it makes people wonder if Goldman Sachs has taken over the US Government’s financial operations. Many media articles have focused on the extensive influence of Goldman Sachs over US government agencies and policies. Do a websearch for “Government Sachs” and you will see more media articles than you will have time to read! Do we detect a possible cooperative effort by the US Federal Reserve Board and Goldman Sachs to “save the Fed” and “save Wall Street” by engineering this secretive accounting trick to transfer the Fed’s toxic assets to the responsibility of the taxpayers?
Rep. Ron Paul, a long-time critic of the Fed, has called for auditing and perhaps, ending, the Fed. Many more in Congress have been supporting his efforts. Perhaps this latest secretive effort by the Fed to hoodwink the Congress and the American people will motivate more hitherto-gullible Senators and Representatives to conduct an in-depth audit of the Fed. In my humble opinion, this secretive action by the Fed indicates that the Fed is now waging a clandestine war against the US Congress and the USA itself in order to “save itself” by accounting tricks which dump the Fed’s major financial risks onto the US government without any act of Congress to permit it. At the very least, the Congress needs to take back all emergency powers granted to the US Treasury in the Autumn of 2008 during the Bush administration before the Fed succeeds in toppling the nation’s finances and the power of Congress to govern the nation. If Congress doesn’t slap down the Fed’s secretive move, the US Congress will be signaling to all American citizens (and the world) that the Congress is now a mere vassal of the Federal Reserve Board.
I wonder if President Obama even knows about this deceptive action by the Fed? Does Obama even realize that the Federal Reserve Board is usurping and undermining his authority as well? If Obama doesn’t fight back against the Fed’s “law unto itself” attitude, then Obama will look like a mere “figurehead” president who is not actually governing the nation. I wonder if the Fed and Tim Geithner, the current US Treasury Secretary–who previously was the President of the New York Federal Reserve Bank District (see second link below) –assumed Obama lacked the intellectual heft to ever grasp that he may simply be a dupe of the Fed and the Big Banks. Either Obama will submit to the Fed’s grab for power and reveal himself to be a mere “figurehead” president or he will get angry and use his presidential powers to lead the counterattack against the Federal Reserve Board’s secret actions to save itself at the nation’s (and Obama’s) expense.
The fate of the nation may be determined by whether the Fed is able to perpetrate this action on the nation without any approval by the Congress. It begs the question: What other deceitful things has the Fed been doing behind the scenes that were not previously caught? The entire world’s investment community and foreign chiefs-of-state are also likely watching this clandestine Fed power-grab to see who is really governing the USA. Is Obama and the Congress governing the USA or is the Fed controlling the USA? If the Fed is effectively controlling the USA, I expect the rest of the world to further insulate itself from the Fed and the US dollar (controlled by the Fed) to prevent the US Fed from effectively taking over their nations as well. Their actions could trigger the prophesied collapse of the current, US dollar-based, global financial system called “Babylon the Great” in Revelation 17-18, about which I have posted many times at this site.
My thanks to an alert reader who send the first link to me.