Ben Swann Reality Check: Why We Need To Audit the Federal Reserve [video]_Featured_, Banksters, Federal Reserve, Videos Wednesday, August 1st, 2012
Ben Swann Reality Check takes a look at the history and present activities of the Federal Reserve Bank and why the Fed needs to be audited.
To understand how the Federal Reserve affects you, first you must understand what the Federal Reserve is. The Federal Reserve Bank was started in 1913 by an act of Congress – but not really. Congress allowed the creation of the Fed, but the Federal Reserve Act of 1913 wasn’t drafted by Congress. It was drafted under great secrecy at a meeting of associates of some very powerful men at a place called Jekyll Island. The men represented at that meeting included JP Morgan, William Rockefeller, and the Rothschild family. The wealth of the five families represented at that meeting totalled 25% of all of the wealth in the world at that time.
If you have not read the outstanding book about the creation of the Fed called “The Creature from Jekyll Island,” by G. Edward Griffin, you should. It explains in great detail how the Federal Reserve Bank came into existence.
The Fed was drafted with five objectives:
- Stop competition from newer banks.
- To obtain a franchise to create money out of nothing for the purpose of lending
- To get control of all of the reserves of other banks so that reckless banks would not be over-run
- To shift the losses from the banks to the taxpayers
- To convince Congress that the purpose was to protect the public
The Federal Reserve Bank is not responsible to anyone – not to Congress, not to the President, and most importantly, not to the American people.
In 2011, the U.S. Government Accountability Office (GAO) conducted a first of its kind audit of some of the lending practices of the Federal Reserve. According to the GAO audit, the Federal Reserve issued $16.1 trillion in secret loans between December 1, 2007 and July 21, 2010. The following list of firms and the amount of money that they received is listed on page 131 of the GAO audit report….
Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion
Senator Bernie Sanders of Vermont issued the following statement regarding the GAO audit: “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… Among the investigation’s key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report.”
“No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president,” Sanders said.
There is no process by which the Fed prevents conflicts of interest. For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.
On September 19, 2008, William Dudley, now the New York Fed president, was granted a waiver that allowed him to keep investments in AIG and General Electric at the same time, AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings is because it might have created the appearance of a conflict of interest.
The Audit the Fed bill is one of the few bipartisan efforts to pass the House of Representatives in years. Does auditing the Fed men that the Fed will change any of its behaviors? If not, then why not audit them? If so, then all the more reason to shine a light on what the Federal Reserve is really doing.