Fed Defies Transparency Aim in Refusal to Disclose (Update1)
Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.
"The collateral is not being adequately disclosed, and that's a big problem," said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. "In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin."
Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.
The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months, in the midst of the biggest financial crisis since the Great Depression.
Emphasis added by me.
As the Federal Reserve will be happy to tell anyone -- including all those who see it as the heart of monetary evil -- it's a private entity and not subject to Government rules.
I doubt Bloomberg will succeed -- but still hope they will!
Total Fed lending topped $2 trillion for the first time last week and has risen by 140 percent, or $1.172 trillion, in the seven weeks since Fed governors relaxed the collateral standards on Sept. 14. The difference includes a $788 billion increase in loans to banks through the Fed and $474 billion in other lending, mostly through the central bank's purchase of Fannie Mae and Freddie Mac bonds.
Emphasis added by me.
Hey, get ready for those Zimbabwe prices next year! That's inflation knocking on the door. Soon it will kick down the door!
And of course the Fed doesn't want to disclose. Don't any of you get it? This is the same game of musical chairs that's been going on since Reagan. The music of lies must continue or -- as in Ring Around the Rosey -- All Fall Down!