A Closer Glance at the Fed Audit, Please
It’s been available for almost six months now: the first independent audit of the Federal Reserve. In case you haven’t read it top to bottom, former Congressman Alan Grayson, who petitioned the study along with Rep. Ron Paul, wants to draw your attention to some of his favorite parts.
As The Nation magazine’s chief editor Katrina vanden Heuvel recently wrote of the previously concealed $7.7 trillion in loans the Federal Reserve made available to the banks instead of the American people during the fallout of the crisis: “The problem isn’t just that this was done in secret; it was that those rates were only available to banks, not average Americans, millions of whom were desperate for a chance to reduce the interest on their own debt.”
For making details of some of the most egregious diversions of the public wealth quickly and easily accessible, Grayson’s roundup of the report, which he calls an “autopsy of the undead,” deserves to be read in full. –ARK
Alan Grayson at The Huffington Post:
Page 131 — The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. That’s right, more than $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.
Page 205 — Separate and apart from these “broad-based emergency program” loans were another $10,057,000,000,000 in “currency swaps.” In the “currency swaps,” the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion. That’s almost $100,000 for every man, woman, and child in America. That’s an amount equal to more than seven years of federal spending — on the military, Social Security, Medicare, Medicaid, interest on the debt, and everything else. And around twice American’s total GNP.
Page 129 — In October 2008, the Fed gave $60,000,000,000 to the Swiss National Bank with the specific understanding that the money would be used to bail out UBS, a Swiss bank. Not an American bank. A Swiss bank.