Friday, April 1, 2011

Former Fed Director of Monetary Affairs Rips Fed Lending During the Crisis

“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007, about the new disclosures of lending made by the Fed during the crisis, reports Bloomberg.

Included in the court-ordered 29,000 page document dump by the Fed are revelations that during the financial crisis, the Fed lent money to a local bank in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.

During one nine-day period at the height of the subprime phase of the crisis, the Bank of  China was the second largest borrower.

Of course, the usual U.S. elitist Wall Street banks got their share. JPMorgan Chase, Bank of America, Citigroup Inc. and Morgan Stanley, all borrowed tens of billions of dollars from the Fed's discount window, the released documents shpw.

There's 29,000 pages here, so there are likely to be more discoveries. EPJ's own Bob English is working on a few odd transactions that he has spotted, and he'll have a full report within a day or so.

But, bottom line, what the documents show is that the Fed takes care of those it wants to take care of, and that's it. The Fed, as it always does, took care of the elitists on Wall Street. And, it took care of its fellow central bankers, but it left the average American out to dry, as it always does. Through the court forced disclosures it becomes even more  obviousthat the Fed is an elitist institution that is used by the elitists as a piggy bank. Beginning and end of story.

Reinhart isn't kidding when he says that this is bad for the long-term reputation of the Fed. No wonder they fought in court to keep these documents secret. It makes you wonder what else they are hiding since the Fed continues to aggressively, in every way possible, try to derail Ron Paul's call for an audit of the Fed.


  1. An audit is nice, but it'd be better if it was phased out and eventually abolished.

  2. Well, no evidence exists suggesting that abolition will come anytime soon. Abrupt policy changes tend not to occur. Politico-economic modifications typically occur over time; they evolutionize rather than revolutionize. If anything, an audit is the first step in the transition towards abolition.

  3. These crooks should be in jail. The banksters sponged up billions while we peons try and keep up with this crap.

    When is the American public going to rise up against this theft? The politicians laugh at us, just vote for it and then we will tell you how we will screw you all. George Carlin (RIP) was right, 'they got us by the balls'.

    I am totally sickened by this display of thuggery, arrrrrrrrrrrrrrrrrrrrgh.

  4. Although there are certainly more damning pieces of information in the documents, the rather inconsequential loan to the Libyan company will probably be disproportionally damaging, simply die to current events- if the MSM deigns to report on it.

    I eagerly await the full EPJ analysis of the documents!