LaRouche: Fed's Actions are Criminal; Congressmen Who Facilitate Them Should Be Prosecuted
September 25, 2009 (LPAC)—Hearings in the House Financial Services Committee today underlined, for those who are not stupid, that the Federal Reserve, backed by the White House, totally rejects any and all disclosure of its activities to anyone.
What are they hiding?
The criminality and outright treason of the Federal Reserve in threatening a 1923 Germany-style hyperinflationary wipeout of the United States, with its out-of-control printing of money. The Fed has lent, spent, and guaranteed $11.8 trillion in securities bailouts this year, and according to its own Richmond branch bank, now guarantees just about half of all the liabilities in the entire U.S. financial system. While the Fed has the monetary aggregate of the United States growing at 20-21% annual rate, bank credit to the economy is sharply contracting, particularly in August and September, perhaps at a negative 15-20% rate. This intensifying credit crunch simultaneously with skyrocketing money-printing, is a recipe for an early hyperinflationary explosion of the U.S. economy, as illustrated in Lyndon LaRouche's "Triple Curve" diagram.
Most members of "Bailout Barney" Frank's committee avoided the crucial issue, led by Frank himself. The hearing was held on the subject of Rep. Ron Paul's bill to require the Federal Reserve to be completely audited every year by the Government Accountability Office (GAO). The bill is sponsored by 296 Members of the House and could pass tomorrow; it is dreaded by Ben Bernanke and the Fed. Bailout Barney is trying to contain its impact by a deal to incorporate the Paul bill in some form into "financial regulation reform" legislation which Frank and the White House are working on.
While the Congressmen were sparring politely with the Fed's general counsel today, Bloomberg News (which is suing the Fed to try to force disclosure) reported its latest calculation of the $11.8 trillion ongoing total Fed bailout. Despite apparently offering Congress "more transparency," the Fed: refuses to reveal the recipients of these bailout loans, guarantees, and purchases of securities; refuses to reveal the collateral it is buying or accepting for them; refuses to reveal the interest rate it is paying banks (for the first time in its history) to deposit their "excess reserves" at the Fed. These reserves at the Fed have grown from $2 billion to $900 billion in a year! This is some of the money—much of it borrowed from the Fed in the first place—which the banks will not lend into the real economy.
The Federal Reserve has bought nearly half the Treasury Securities issued this year, making it a bigger holder of Treasuries than China or Japan! It has bought 30% or more of the GSE securities issued; is in process of buying up $1.2 trillion "worth" of collapsing mortgage-backed securities, to cite one example; and may have guaranteed half of all the financial liabilities in the whole system. It is preserving and encouraging the cancer of the "non-bank" securitized debt creation, which built the bubbles which blew up from July 2007 on, and it is doing so with hyperinflationary money printing.
"It's 1923 Germany!", Lyndon LaRouche thundered. "Just say so! This indicates we're in a 1923 Germany situation, but actually, it's on a world scale. "Put this out right now," he said. "The right of the Federal Reserve to conceal any of this stuff is junk! That has to be denounced! The Federal Reserve is a private company, under Federal regulation,— it has no right to conceal anything! Particularly at the time the US is being driven into a hyperinflationary explosion, leading to a total collapse. The Fed policy is insane! The Fed has to be brought under strict control, or the United States is going to go down. To support the Fed in this is tantamount to treason. And anyone in the Congress who does that is acting in a manner which is tantamount to treason; and we do mean Barney Frank!
"That's the only way you're going to get at this!", LaRouche went on. "You're not going to get at this by scandalizing it; you're only going to get at this by making threats. And the threat is a form of saying what the consequences are. This is criminal. It is criminally insane. Barney Frank is criminally insane! And he has to be removed, or shut up, or gagged! We have to get rough on this thing. This is a hyperinflationary destruction of the United States, and we cannot allow courtesies or debates on details to obstruct the point! The Federal Reserve is insane and out of control and crooked! These responsibilities lie with the Federal government and with the Federal Treasury. The idea that the Fed can substitute itself independently of the Treasury, in this kind of business is treasonous, it's stupid, it's criminal, it's crooked. And only crooked members of Congress could allow this to happen!
"And that's what we're going to tell the American people out there," he emphasized. "There's a mass strike in process, and with a mass strike in process, if the people know that this is the issue, they're going to react! You bastards have got to understand that there's a new thing going on in this country, and you guys are all subject to impeachment and all other kinds of problems, by the American people, who will not tolerate this kind of crap! You want to take your regime down like the East German regime? You're on the way to doing it. That's what we have to say! You have to have the facts, but you've got to stick to the issue. The issue is: what do we do if they do this! Well, we say we pull them down!
"Use the power we have," LaRouche concluded. "The power we have is, we can bring some of these guys down! And, we're going to bring them down!"
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