Fed cannot account for $9 trillion ... Central banks 'to blame' for financial crisis
TheDailyBell - Issue 284 • Wednesday, May 13, 2009
"There are two sides to every issue: one side is right and the other is wrong, but the middle is always evil."
- Ayn Rand
Beginning of the end? Fed cannot account for $9 trillion
Win McNamee/Getty Images
The Federal Reserve apparently can't account for $9 trillion in off-balance sheet transactions. When Rep. Alan Grayson (D-Orlando) asked Inspector General Elizabeth Coleman of the Federal Reserve some very basic questions about where the trillions of dollars that have come from the Fed's expanded balance sheet, the IG didn't know. Worse, nobody at the Fed seems to have any idea what the losses on its $2 trillion portfolio really are. "I am shocked to find out that nobody at the Federal Reserve is keeping track of anything," Grayson says. Grayson asked Coleman if her agency had done any research into the decision not to save Lehman Brothers, which "sent shockwaves through the entire financial system," Coleman said it had not. "What about the $1 trillion plus expansion of the Federal reserve's balance sheet since last September?" Grayson asked. "We have different connotations," Coleman replied. "We're actually conducting a fairly high-level review of the various lending facilities collectively." Translation: Nobody at the Fed knows where the money went. - Money News
Dominant Social Theme: Some troubles need to be resolved.
Free-Market Analysis: We saw the interview with Elizabeth Coleman on TV and then again and again and again on youtube.com. It is entitled "Is Anyone Minding the Store at the Federal Reserve?" and it is one of the single most astonishing moments (or minutes) ever manifested or preserved in this already-amazing digital era. A century ago, when the powers-that-be pushed through the act that set up the American Federal Reserve - which basically kicked off the central banking era in America and abroad - the kind of technological ubiquity offered by the Internet would certainly have been seen as a major and alarming challenge. Well, it is.
The Grayson/Coleman confrontation has to be seen to be believed, and even then it may not seem quite believable. How could the Fed, in all its monied majesty, offer up someone so unprepared to answer the questions of a single quiet and persevering congressman. Grayson is a liberal, socialist-oriented legislator - a good government type who is fast making a reputation for taking on government corruption. He is pro-regulation, but has not been shy about confronting high profile institutions. He may not want to shut down The Federal Reserve but he certainly wants to make it operate under additional scrutiny. And he makes it clear he believes the Fed needs it. And now Coleman knows it. [more]
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