foreign lending

Audit of the Federal Reserve finds massive bailouts

Congress pushed for an audit of the Federal Reserve.  They wanted to know what was going on behind closed doors.  The Fed wasn’t crazy about that, but the lost on that one.  The result?  Well, how about over $16 trillion in bailouts that the American public didn’t know a damned thing about for starters?

That’s right folks, $16 trillion was “loaned” out at 0% interest to corporations and national banks throughout the world.  It hasn’t been paid back.  So what’s the big deal?  Here’s an analysis of what we’re talking about:

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

Keep in mind that the Federal Reserve isn’t exactly a private bank.  It’s a semi-private bank that’s in charge of massive amounts of the United States economy.  In addition to acting as a bank, loaning money to other banks that permits them to loan it to us, it also lists the following as among it’s function.

The Federal Reserve has responsibility for supervising and regulating the following segments of the banking industry to ensure safe and sound banking practices and compliance with banking laws:

Herman Cain flip-flops on Federal Reserve audit

While filling in on The Neal Boortz Show on December 29th, Herman Cain launched into a rant defending Federal Reserve and downplaying efforts for an audit. His point was that the Federal Reserve wasn’t doing anything secret, to his knowledge, and that the movement for an audit amounted to nothing more than a lack of understanding as to how the nation’s central bank operates.

Here is a transcript of Cain’s remarks:

[T]he Federal Reserve already has so many audits, it’s ridiculous. I don’t know why people think we’re gonna learn this great amount of information by auditing the Federal Reserve. Now, I no longer serve on the board of the Federal Reserve. I’m not being defensive of the Federal Reserve; in fact, some of the policies and some of the actions of the Federal Reserve, I don’t agree with because the attitude and the non-politization in the 90’s when I served is totally different than what’s going on today. But that’s another matter.

But people who say, “we outta audit the Federal Reserve because we don’t know enough about it.” Well, here’s the advice I’ve given to people who ared worried about an audit of the Federal Reserve; call ‘em up, and ask ‘em if you can stop by and have one of their PR people or one of their Public Relations people explain to you how the Federal Reserve operates.

I think a lot people are calling for this audit fo the Federal Reserve because they don’t know enough about it. There’s no secrets going on in the Federal Reserve, to my knowledge. And I tell people, we’ve got 12 Federal Reserve banks, find out which district you’re in, call ‘em up and go from there.

We don’t need to waste money with another commission, or an audit that’s not necessary, because, folks, we’ve gotta lot of other problems we need to worry about.

Herman Cain defends the Federal Reserve

I’ve mentioned before that I’m skeptical of Herman Cain, who expected to make his second presidential bid official any day now, in part because of his deference to government over the free market. For example, he backed TARP at the height of the financial crisis in 2008 - calling it a “recovery plan.” He slammed opponents of the program on the right, calling us “free market purists.”

Now, Cain, a former board member of the Federal Reserve, is telling us that the central bank already has internal audits, that there isn’t anything new that we’d learn from a significant audit and they haven’t been hiding anything from Americans. He chalks it up to people not knowing enough about the Fed.

Hm. Ok. If the Fed wasn’t trying to hide anything, why did they want until legislation was passed with a statutory requirement forcing to release the names of foreign banks they loaned money to?

I’m not saying there is a government conspriacy here, but there has been an incredible lack of transparency on the part of the Federal Reserve. For example, why does Fed Chairman Ben Bernanke claim that they aren’t printing money when that’s exactly what quantitative easing is?

Despite Cain’s claims to the contrary, he is defending the Federal Reserve. And it doesn’t reflect the behavior of someone claiming to be a conservative.

Here are Cain’s comments:

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