Sept. 16, 2011
Unelected, Unaccountable, Unrepentant:
The Federal Reserve
Using your money to bail out European commercial banks
Michael @ The Economic Collapse
Emphasis added below
For a moment, imagine that there is a privately-owned organization in the United States that can create U.S. dollars out of thin air whenever it wants and can loan that money to whoever it wants to. Imagine that this organization is able to act with the full power of the U.S. government behind it, but that nobody in the organization is ever elected by the American people, and that for all practical purposes the organization is not accountable to the president or to Congress.
Imagine that the organization is able to make trillions of dollars of secret loans to banks, to foreign governments and even to their close friends without ever having to face a comprehensive audit. Does that sound preposterous?
Well, such an organization actually exists. It is called the Federal Reserve, and today we found out that once again the Fed is going to be taking huge piles of your money and loan it to commercial banks in Europe. The Congress cannot overrule this decision. Neither can Barack Obama. Because it has so much power, many refer to the Federal Reserve as "the fourth branch of government", but unlike the other three branches of government, there are basically no significant "checks and balances" on the Federal Reserve.
If you don't like the fact that the Federal Reserve is racing in to help big foreign banks survive the European debt crisis that is just too bad. The Federal Reserve pretty much gets to do whatever it wants to do, and the folks over at the Fed simply do not care whether you like that or not.
So what in the world just happened today? The following is how an article on CNBC explained it.... Just ahead of the Wall Street open Thursday, the European Central Bank, along with the U.S. Federal Reserve, Bank of England, Bank of Japan and Swiss National Bank announced they would offer three-month dollar loans to Europe's commercial banks, easing dollar funding constraints.
It must be nice to do whatever you want without having to get the approval of anyone else. What do you think Barack Obama would give for such power right about now? The Federal Reserve and other major central banks around the world decided that lending big European banks gigantic piles of dollars would be a good idea, so they are just doing it. No debate, no votes and no democracy - they just tell us how things are going to be and that is that.
So how much money is going to be loaned out? Well, according to an article in The Daily Mail, big European banks are going to be able to borrow an "unlimited" amount of money.... The deal announced yesterday means banks will be able to borrow ‘any amount’ of money in three separate auctions in October, November and December. Banks will have to put up collateral, or security, to tap the emergency funds.
Wow - I wish someone would offer to lend me an "unlimited" amount of money. But of course this really is not going to solve anything in the long run. You can't solve a raging debt problem with more debt. Yes, it will help the big European banks with their short-term liquidity problems, but it will do nothing to fix the long-term structural problems that are tearing Europe to pieces.
Win Thin, a senior currency strategist at Brown Brothers Harriman, said essentially the same thing to CNBC today....
"They're taking care of the symptoms, but the underlying illness is still out there. On the margin, it's positive. Until Greece defaults and we clear this whole thing up, they're still treading water"
So, no, the financial problems of Europe have not been solved. Just think of this latest move as a temporary band-aid. So why get upset about it? Well, what all of this shows is just how arrogant the Federal Reserve is. The Federal Reserve gets to throw around trillions of dollars without any accountability to the American people. As I have written about previously, the Federal Reserve made $16.1 trillion in secret loans to their friends during the last financial crisis. This was revealed in a GAO report, and members of Congress such as Ron Paul and Bernie Sanders tried to get people to pay attention to this. The following is a statement about this report that was taken from the official website of Senator Sanders....
"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world."
So how much of that money went overseas? Well, it turns out that approximately $3.08 trillion of that money was loaned to big banks and major financial institutions in Europe and Asia. Barack Obama can't lend trillions of dollars to foreign banks. So why does the Federal Reserve get to do it?
Sadly, most Americans know very little about the Federal Reserve. In the United States today, most Americans graduate from high school without ever learning much of anything about the Fed. But if you really want to understand what is going on with our economy, it is absolutely critical that you understand the Federal Reserve. The following are some more reasons why you should be upset about what the Federal Reserve has been doing....
* The Federal Reserve is a perpetual debt machine. Today, the U.S. national debt is 4700 times larger than it was when the Federal Reserve was created back in 1913.
* The Federal Reserve has recently been actually paying banks not to make loans. Right now banks can park money at the Federal Reserve and make risk-free income without having to make loans to the American people.
* Current Federal Reserve Chairman Ben Bernanke has a track record of failure that is legendary, and yet George W. Bush and Barack Obama both backed him 100%.
* The Federal Reserve system is designed to create inflation. The truth is that the United States has only had a persistent, ongoing problem with inflation since the Federal Reserve was created back in 1913.
* Since 2008, what the Federal Reserve has been doing to our money supply has been absolutely insane. Eventually this is going to have very serious consequences for us.
* The U.S. government has handed over the task of "centrally planning" our economy to the Federal Reserve. The Fed decides what the target rate of inflation should be, what the target rate of unemployment should be, what interest rates are going to be and what the size of the money supply is going to be. This is quite similar to the "central planning" that goes on in communist nations, but very few people in our government seem upset by this.
* The Federal Reserve picks "winners" and "losers" in the financial system. For example, when the last financial crisis hit, the Fed bent over backwards to help out the big Wall Street banks, but hordes of small banks were left out in the cold.
* As mentioned above, the Federal Reserve has become way, way too powerful. The Fed is able to do a lot of things that the three branches of government are simply not able to do. Fortunately, there are a few of our leaders that are alarmed by this. For example, Ron Paul once told MSNBC that he believes that the Federal Reserve is now more powerful than Congress.....
"The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress."
As long as we continue to use a debt-based currency that is controlled by a privately-owned central bank, we are going to continue to have permanent inflation and government debt that expands at an exponential pace.
The "central planning" done by the Federal Reserve has created bubble after bubble after bubble. Our dollars is on the verge of dying and our financial system is about to collapse. The Federal Reserve system simply does not work. Hopefully we can start sending more politicians to Washington D.C. that will be willing to stand up to the Federal Reserve. But for now, the Federal Reserve is going to keep running around doing whatever it wants to do whether we like it or not.
"...in all these things we are more than conquerors through Him who loved us. For I am persuaded that neither death nor life, nor angels nor principalities nor powers, nor things present nor things to come, nor height nor depth, nor any other created thing, shall be able to separate us from the love of God which is in Christ Jesus our Lord." Romans 8:37-39
Posted with permission
Read these earlier articles from The Economic Collapse
20 Signs of Imminent Financial Collapse in Europe
10 Signs That Economic Riots And Civil Unrest Inside The US
Barack Obama’s White House Rural Council: Central Economic Planning For America’s Heartland
65 Ways That Everything That You Think That You Own Is Being Systematically Taken Away From You