Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts

GAO report ^ | 11-30-2011 | edcoil

[edcoil]

The first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke(pictured to the right), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.

What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010,

[Hemingway's Ghost]

I know and you know that printing money does not add any VALUE to the economy. How come the financial gurus that are responsible for our money supply does not know that?

I'm sure in their heart of hearts they do know it.

[dennisw]

I do believe much of this 16 trillion has been paid back to the Federal Reserve even though the author says it has not. The Federal Reserve is a private bank

[AEMILIUS PAULUS]

Thanks. However, my computer has only a dial up and the site you directed me to will not come up. I’ll try later.

[09Patriot]

Don’t worry, it’s only $16 Billion in Europe. I know in england they dont like to use the word billion so it would be 1600 million million ? my brain hurts.

[dennisw]

Come on.... I believe much of that money has been paid back. Or possibly the 16 trillion is toxic assets the FR took from these banks and gave them US Treasuries on some kind of loan basis. An exchange. Having US Treasuries on their books made the banks look healthy. Lots of question marks.

[mmichaels1970]

Come on.... I believe much of that money has been paid back.

I believe you're correct. I believe this report is detailing "emergency loans" that have been made. There's a page in there with dollars still outstanding. I think the point of the article is not that the fed is owed 16T, it's that they made 16T in "emergency" loans.

The point that can be debated, imho, is whether or not the term "emergency" and be synonymous with "bailout".

[Rumplemeyer]

bump

[JakeS]

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010,

Would someone please explain to me why this isn't criminal, and if it is why have there been no arrest?

[mmichaels1970]

Would someone please explain to me why this isn't criminal, and if it is why have there been no arrest?

GAO sites the Federal Reserve Act of 1913.

the Federal Reserve Board invoked emergency authority under the Federal Reserve Act of 1913 to authorize new broad-based programs and financial assistance to individual institutions tostabilize financial markets.

Here is the full doc from the GAO.

And here's a link to the Federal Reserve Act. It's very hard to navigate though.

[dennisw]

But this is what the author at Silver Bear cafe says. That the money has not been paid back—>>>
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What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest.

[JakeS]

I’ve been reading it.

These guys should be under the jail.

[Pagey]

bttt

[mmichaels1970]

The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest.

Ok. I can certainly cede you that point. I also agree that most of the money has been paid back and the GAO study cited lists that there is a very minimal risk of the money NOT being paid back.

My problem comes from the loans themselves being done under "emergency" authority.

I'm certainly no expert. But when the fed deems it needs to make these loans, doesn't it order more money to be printed by the treasury? Even if the fed is a private bank, if these "emergency" loans result in an increased creation of currency by the treasury, it would certainly affect us all right?

If you look at my specific posts, you should see that they are merely links sections of the GAO audit itself. I haven't drawn any conclusions as to how this affects me if at all. This is certainly something I'd like to know more about though.