Amazingly, mainstream media (David Wessel, an award-winning journalist for the Wall Street Journal) prints what we understood years ago:
the Fed has now become the "fourth branch of government," raising and spending vast sums of money with little oversight from elected officials. He notes that Congress, which is elected and has authority under the constitution to raise and spend money, has raised $700 billion to resolve the banking crisis. The Federal Reserve has allocated more than $1 trillion.The following is from a less mainstream source - on the hill, Audit of Federal Reserve gains momentum while
Wessel drives this key point well: enormous power has been give to a small number of people who were not chosen by the citizens.
Not surprisingly, Federal Reserve Chairman Ben Bernanke has spoken out strongly against legislative efforts to force an audit (of Fed actions -- me). Testifying before the House Financial Services Committee, Bernanke claimed such a review would "compromise independence." He added that if the GAO was to make judgments about the Fed's policy decisions, it would effectively amount to a "takeover of policy" by the Congress and such scrutiny would be "highly destructive to the stability of the financial system."It's interesting to hear Spitzer's voice again - back from the dead. Democrat Eliot Spitzer, the former governor and attorney-general of New York, recently called the Fed "a ponzi scheme" on MSNBC www.youtube.com/watch. As attorney general of NY Spitzer played an important part in a tobacco-trail-reminiscent attempt to challenge the legality of mortgages - using existing laws prohibiting predatory lending. Soon after coming up with the idea of ptosecuting the banks. a sex scandal involving him was uncovered and he resigned. Then the banks were bailed out. Not implying anything - just sayin'.
Spitzer has also been highly critical of the government's role in bailing out AIG, calling for an immediate government inquiry and alleging that institutions such as AIG and Goldman Sachs, "continue to absorb enormous sums of taxpayer support without either demonstrating the genuine need for such support or altering their behavior after receiving it."Goldman Sachs / AIG was a legally interesting situation. It's interesting to see Spitzer still has the instincts of an attorney general. Good Guy.
My friend remarks:
Could this spell the end for the American financial system as we know it? The answer would determine weather you wish to short the entire US economy or not.