More On Why The Fed Needs Audited

The Market Ticker - May 5, 2010

More On Why The Fed Needs Audited

and why Chris Dodd, among others, don't want it to happen.

Ostensibly, the QE program was designed as the first leg in a two-step process to remove the bad paper from the banks balance sheets and then dump it on Fannie Mae and Freddie Mac as discreetly as possible. So far, Bernanke has been relatively successful in convincing people that he was buying the assets to increase lending, which was clearly never the objective. Quantitative Easing was a fraud from the get-go.

No kidding.

Not only that, but QE was blatantly unlawful as far as I can determine, as I've laid out more times than I can count.

But you can't really expect the Congress, which put in place Fannie and Freddie, left them alone despite documented accounting fraud, had one of their number literally sleep with a former executive, and which still cowers when their arm approaches to take these folks on, can you?

Well, actually, yes you can.

More to the point, yes we must.

Bernanke has about $1.2 trillion of this paper from these trashheaps, and it's rotting in his file cabinet. Each day that goes by makes it more dangerous, as mortgages are still defaulting and both Fannie and Freddie are still losing money.

They were both bankrupt in 2008, and they still are.

If Bernanke is not forced to be accountable to the American people, he could easily dump the entire load of trash on Fannie and Freddie, potentially imposing a $500 billion or more liability directly on Treasury. This would make a mockery of Geithner's claim that "TARP has cost less than expected" and create a rather nasty little funding problem.

Can this be prevented?

YES.

How?

Full audits. Now and evermore. Annually.

Bernanke took this on his balance sheet, he must be prevented from using what I argue was an unlawful act to usurp the appropriation power of Congress.

Don't expect this to get a lot of press and notice in the Congress, but you, the American sheeple, better wake up to what's going on. The magicians love to wave their arms in the air and misdirect you while they steal your wallet, and in this case, the magician is Bernanke with his ill-obtained hoard of rapidly-decaying Fannie and Freddie paper.