From December 2007 – June 2010, during the worst period of the recession in the US, in which employment was at an all-time low, the Fed secretly loaned 16 trillion dollars to foreign banks, US banks and corporations.
Ben Bernanke, Alan Greenspan, and other bankers were vehemently opposed to the study claiming it would adversely affect the markets.
The dominant investment bankers, according to Carroll Quigley, are the ones that have the power to lift up or cast down. The main financial powers are in the hands of these investment bankers, also known as “international” or “merchant” bankers.
These men remain behind the scenes in their own unincorporated private banks forming a system of international co-operation and dominance, far more powerful and secretive than that of their agents in the central banks. The dominance of these investment bankers is based on the control over flows of credit and investment funds locally and abroad.
The power of the investment banker is exercised by the personal influence and prestige of men who had “demonstrated their ability in the past to bring off successive coups, to keep their word, to remain cool in a crisis, and to share their winning opportunities with their associates.” (Carroll Quigley, Tragedy and Hope, p327)
Federal Reserve Loans
The operation of the emergency lending by the Federal Reserve was almost entirely outsourced to private contractors such as Morgan Stanley, JP Morgan Chase and Wells Fargo. These same firms were also recipients of trillions of dollars in Fed loans at near-zero interest. Morgan Stanley was handed the largest no-bid contract worth $108.4 million for its assistance in managing the Fed bailout of AIG.
On Sept. 19 2008, William Dudley, now the New York Federal Reserve president, was granted a waiver allowing him to keep investments in AIG and General Electric when bailout funds were made available to those companies.
According to the report, waivers of conflict of interest were provided to employees and private contractors enabling them to keep investments in the same financial institutions and corporations that had been granted emergency loans.
CEO of JP Morgan Chase served on the board of directors at New York Federal Reserve when his bank was granted more than $390 billion in financial assistance, while JP Morgan Chase acted as one of the clearing banks for the Fed’s emergency lending programs.
Sen. Bernie Sanders who directed the Government Accountability Office to conduct the Fed audit declared that no agency of the United States government should be allowed to bail out a foreign bank or corporation without the direct approval of Congress and the president. While the Federal Reserve labels its secret bailouts an all-inclusive loan program, virtually none of the money has been repaid to date. The $16 trillion dollar loans were never made public.
To Sanders, the conclusion is simple. “No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed,” he said.
To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion…
Way back in 1914, Benjamin Strong was made first governor of the New York Fed as the joint nominee of Morgan, and Kuhn Loeb and Co. Strong owed his career to the favour of Henry P Davidson of the Morgan Bank. These ties between banking houses were close then and are probably closer than ever today.
In the 1920’s Benjamin Strong and Montagu Norman used the financial power of Britain and the US to force all the world’s countries to go onto the gold standard and operate it free from all political control. All questions of international finance were to be settled by agreement between banks without government interference. (Carroll Quigley, Tragedy and Hope, p326).
Secrecy has always been a hallmark of the Federal Reserve system, and it will be interesting to see whether this disclosure has any discernible effect on the status quo.