Posted by: John Gilmore | September 16, 2006

Fed Refuses to Disclose Recipients of $2 Trillion in Lending

Let’s think about a hypothetical situation for a moment. Let’s say that today it was announced that a privately owned bank – let’s call it the Federal Bank and Trust – was given authority to print the money of the United States Government and charge our government interest on this money for a period of 20 years. This bank would be given the authority to manage our money supply – by adjusting interest rates and the volume of money in circulation. It would be loosely regulated – but would exert immense power over not just our economy – but the world’s economy as well.

What if this fictitious bank then began to use it’s authority to wreak all kinds of havoc within our economy? What if it caused recessions and depressions due to its monetary policy, caused varying degrees of inflation which would systematically devalue the currency of the U.S. Government over time and repeatedly caused asset bubbles that were unsustainable – leading to crashes every few years? What if its monetary system required us to grow our money and economy exponentially – which would eventually lead us to economic collapse at the end of the 20 year period of time? What if this system enriched its private owners – while taking away the wealth of the citizens of the United States through foreclosures and loan defaults? What if this ‘Federal’ bank then began buying U.S. assets by printing money – but would not disclose the assets that were being purchased?

What do you think would happen today if our government made an announcement like this? I have a very good idea – outrage. Our political leaders would be inundated with phone calls and letters demanding that this be stopped. If our political leaders refused to stop it – there would be marches on Washington D.C. demanding the system be changed. Current political leaders would be replaced with leaders who would do what was in the best interests of the United States – regardless of what it might cost them. You and I would demand that this monetary system be changed to something else completely – because the U.S. Constitution is clear – government should be ruled by the people of the United States for the people – it should not be ruled by a small group of powerful interests.

All of the things mentioned above have been happening to us. One problem is that this new monetary system isn’t being announced today – it was announced in 1913. The other problem is that this scenario is not playing out over 20 years – it’s playing out over 100 years. Because this system was created in the U.S. in 1913 before most of us were born and because the owners of this bank have been patiently working behind the scenes for almost 100 years – we are blind to what is happening to us. We accept this system because – it’s the way it’s always been. We don’t know anything else.

The biggest problem of all is that the people behind this monetary system have now gained worldwide control. They not only control our financial system – they have infiltrated our governments. The obvious reason is this – banks do not exert this kind of power – unless it is given to them. Governments around the world gave Central Banks this power. The U.S. Government could at any time decide to rescind the Federal Reserve Act – kick out the Federal Reserve – and begin printing it’s own money – interest free. This has been the biggest fear of the powerful international banking cartel behind the world’s central banking system – which is why they have infiltrated our governments. You can play in the game all you want – just don’t threaten the game itself. It will take real leaders to overcome and remove this cancer that has grown within us.

It’s not hard to see what happens when someone in power opposes this beast – JFK was the most recent example of what happens when you threaten their game. He tried to do what I proposed above – kick out the Federal Reserve and give the U.S. government the power to print its own money. This cartel ended that little experiment within 6 months and sent a very loud message to anyone else who might get the same idea. When was the last time you heard a powerful political leader speak out against the Fed and their fiat currency? I have heard only one – Ron Paul – and it became clear that the mainstream media tried to reduce his exposure at every turn. I assure you – the cartel was watching his campaign closely.

If it doesn’t bother you that the Fed isn’t disclosing where it’s spending this money – it should – for a couple of reasons. The first being that they are not above the law – if they are using government money – the taxpayers have a right to know where it’s being spent and what our potential losses will be. The second reason is that we’re not talking about a small amount of money – $2 trillion is significant. A trillion here and a trillion there and pretty soon you’re talking about real money. The truth is that they do believe they are above the law and can do whatever they want. This would change if the American people ever stood up and demanded they account for their actions.

jg – Dec 15, 2008
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Fed Refuses to Disclose Recipients of $2 Trillion in Lending

Friday, December 12, 2008, 9:50 pm, by cmartenson

by: Chris Martenson

In a foxhole there are no atheists. But well before the praying begins, you find out what people are really made of. Perhaps the big, muscled kid who was unstoppable in basic training goes all to pieces while the skinny guy with the thick glasses saves everyone’s bacon. Or vice versa. The point being that prior to a crisis everything rests on appearances. During a crisis it is actions that matter. That’s when we find out what people, and institutions, are really made of.

Today the Federal Reserve effectively freaked out in the foxhole and declared the spirit of democracy, if not the rule of law, to be disposable conveniences of better times.

In response to a freedom of information act request by Bloomberg News for the names of the institutions receiving public money, the Fed invoked an obscure rule to block the release of this information.

Dec. 12 (Bloomberg) — The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information.

Trade secrets? A trade secret is something like the formula for Coke. A trade secret is an unpatented business process the release of which would harm the competitive position of the holder. I am really at a complete loss to understand what sort of “trade secrets” might apply to the acquisition of bad debt from poorly managed financial institutions.

If anybody can supply one that might make sense in this situation I am all ears.

The important principle here is that democracy cannot operate under the cover of darkness. If every emergency, no matter how slight, results in the immediate suspension of our right to know, then one might reasonably question whether it is a right at all and whether this is a democracy.

This is not an esoteric debate over some fine point of the law, this is a foundational matter. Either rules and laws matter or they don’t. Either they need to be followed by everybody or they can be ignored by everybody. There is no place in our legal system for each interested party to self-interpret laws in whatever manner fits them best.

If the Fed can unilaterally decide to follow some rules and not others, then why not anybody else? Would it be unreasonable for an individual to decide that their mortgage does not need to be repaid because they suddenly interpret their contract differently and to their benefit? Are they really “speed limits” or are they more like “speed guidelines?”

I am being quite serious here, the rule of law is not something to be trifled with. Either we are a nation of laws or we are not. It is no small point that our rule of law is one of the most essential components of our social contract and which separates us from other countries where I would not willingly choose to live.

The Freedom of Information Act requires federal agencies to make government documents available to the press and the public. The suit, filed in New York, doesn’t seek money damages.
“There has to be something they can tell the public because we have a right to know what they are doing,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press. “It would really be a shame if we have to find this out 10 years from now after some really nasty class-action suit and our financial system has completely collapsed.”

Did you catch those words and phrases? “Requires” and “right to know” are pretty straightforward. Requirements and rights are not really negotiable. They either exist or they don’t.

Predictably, the Fed claimed that this crisis is serious enough to trump our assumed (but rarely tested) right to know.

In its response to Bloomberg’s request, the Fed said the U.S. is facing “an unprecedented crisis” when the “loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.”

But some are starting to catch on and noting that it is really not acceptable that a supposedly public institution is refusing to operate in a manner consistent with their charter.

“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, who oversees about $14 billion at New York-based ICP Capital LLC.

Congress is demanding more transparency from the Fed and Treasury on the bailout efforts, most recently during Dec. 10 hearings by the House Financial Services committee when Representative David Scott, a Georgia Democrat, said Americans had “been bamboozled.”
But now that the Fed has decided, unilaterally, to operate under the cover of secrecy I think they should be allowed to do so.

Of course I would also require that their operating charter be revoked and that a parallel currency be stood up so that we the people could decide for ourselves whether the Fed’s arguments for secrecy were worth risking our entire economic future upon.

Said another way, I am willing to let the Fed take all the primary risks it wants but not with my money. Let the Fed either swim or sink depending on how it plays its hand. Taxpayers should not be forced to shoulder whatever these risks are that the Fed feels are too dangerous to even name.

Otherwise people might begin to wonder about that “requirement” to pay back their credit card bills….

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