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I don't know what's scarier, the fact that the Federal Reserve is insolvent, and people don't know it...or....the fact that the FED was lauded just a few years as this all holy institution!
Remember the "Maestro"? All the publicity over Greenspan. He was the "Maestro" (cue the music) who could weave magic. I think that book, The Maestro was on the best seller list.
Shows the power of modern day marketing and the spinmeisters (the media).
the fact that the fed is technically insolvent is only part of our worries.
look at this from denninger:
So here's the story....
NEW YORK (CNNMoney.com) -- AIG announced Tuesday that it completed a deal wiping out $25 billion of its debt to taxpayers by selling stakes in two subsidiaries to the Federal Reserve Bank of New York.
The troubled insurer gave the New York Fed preferred shares of two of its international life insurance companies, including $16 billion of American International Assurance Co. and $9 billion of American Life Insurance Co. The deal was originally announced in March.
How were those values arrived at?
I don't recall an auction process, nor a public offering, nor anything else that we can see. There is a claim that there were bids, but what were those bids?
How do we know that The NY Fed didn't intentionally overpay? After all, we know they did intentionally overpay in other cases, such as settling the AIG "CDS" which, in a bankruptcy, were worth exactly bupkis!
Let me guess - this is a "private matter", even though the "loan" was backstopped and made with public - that is, your and my taxpayer - funds, right?
How is this not yet another scam?
how can americans even make rational financial decisions when there is so much subterfuge going on around them? there is NO WAY to make reasoned financial decisions when you don't have all the facts available.
They get away with it because federal reserve money is not public money. Federal Reserve funds come from the federal reserve which in turn gets the money from... uh... I guess fingers moving on a keyboard entering a very large number into a computer. It doesn't get the money from us. It's a private institution not a government institution. The Fed counterfeits money.
'Course that's a whole different scam, one that they've been playing on all of the world since 1913 and have been trying to play on us since America won our independence.
Just two days before the New York Fed paid A.I.G.’s partners 100 cents on the dollar to tear up their contracts with the insurance giant, one bank volunteered to take a modest haircut — but it never got the chance.
UBS, of Switzerland, alone offered to give a break to the New York Fed in the negotiations last November over how to keep A.I.G. from toppling and taking other banks down with it. It would have accepted 98 cents on the dollar.
But UBS’s good-faith gesture was quickly drowned out by Goldman Sachs and the top French bank regulator. They argued, with others, that it would be improper and perhaps even criminal to force A.I.G.’s trading partners to bear losses outside of bankruptcy court.
The banks and the regulator were confident that the New York Fed was not willing to push A.I.G. into bankruptcy, because earlier in the fall the New York Fed, led by Timothy F. Geithner, had stepped in with $85 billion to prop up the insurer.
The Fed “refused to use its considerable leverage,” Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report to be officially released on Tuesday, examining the much-criticized decision to make A.I.G.’s trading partners whole when people and businesses were taking painful losses in the financial markets.
we all know that was crooked business, and now goldman is doing their happy bonus dance while obama fiddles.
According to its latest report, the Federal Reserve now owns over $1 trillion of mortgage-backed securities, which is 45.6% of all assets owned by it. One year ago mortgage-backed securities were only 0.6% of the Federal Reserve’s total assets.
The Federal Reserve is very highly leveraged, much more than most banks. It is carrying $2,157.0 billion of debt on $52.8 billion of capital, giving it a leverage of 40.8-times more debt than capital. The mortgage-backed securities it owns are 19-times greater than the Federal Reserve’s capital, meaning that if the true value of these assets is less than 5.3% of their book value, the Federal Reserve’s capital is depleted, effectively making it another insolvent institution.
Given that Fannie Mae is itself insolvent and most other mortgage generating federal agencies are not far from perilously sliding down to that same dire financial condition, it is reasonable to assume that the true value of these mortgage-backed securities is less than 94.7% of their book value. Consequently, the Federal Reserve is therefore – on a strict accounting basis – insolvent. It remains liquid because banks continue to provide it with funding and because people continue to accept in commerce and use without question the Federal Reserve’s liabilities, i.e., the paper currency it issues. But for how much longer? (fgmr)
Yep. Ignore the man behind the curtain. I am the Great and Powerful Wizard of OZ!
Sooooo. Since it does not take much a map to see where this path is leading, it seems the real question is How Do We, the (little) People take ourselves Off the Dollar?
find a way to repeal the legal tender law. barter system. let people use competing currencies. buy some Euros, or Swiss Francs. Those are stable currencies.
i think it was bloomberg (i scan over 100 sites a day) but i found almost the same information on huffington post, quoted here:
A brutal report issued Monday by a government watchdog holds Timothy Geithner -- then the head of the Federal Reserve Bank of New York and now the nation's Treasury Secretary -- responsible for overpayments that put billions of extra tax dollars in the coffers of major Wall Street firms, most notably Goldman Sachs.
The authoritative new narrative describes how, while bailing out insurance giant AIG last fall, a team led by Geithner failed nearly every step of the way.
Instead of bargaining with AIG's numerous counterparties to resolve its billions of dollars in souring derivatives contracts, Geithner's team ended up paying top dollar for toxic assets -- "AN AMOUNT FAR ABOVE THEIR MARKET VALUE AT THE TIME," the report notes.
"There is no question that the effect of FRBNY's decisions -- indeed, the very design of the federal assistance to AIG -- was that tens of billions of dollars of Government money was funneled inexorably and directly to AIG's counterparties," the Office of the Special Inspector General for the Troubled Asset Relief Program said.
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