The central bank has effectively created its own limitless slush fund with no accountability to anyone and no Congressional oversight.
By Pam Martens and Russ Martens of Wall Street on Parade.
Without one vote by an elected official, the Federal Reserve just became a brand new national legislative body. It will, without any oversight in Congress, decide what corporations and businesses to save and which to let fail.
While the corporations and small businesses will receive “billions,” Wall Street’s mega banks and trading houses will, once again, have trillions of dollars of toxic securities removed from their balance sheets, including plunging stocks through the Fed’s Primary Dealer Credit Facility. The Fed also announced that its purchases of Treasury and Mortgage-Backed Securities (MBS) will now be limitless, rather than capped at a total of $500 billion. The reason for that change is that the Fed blew through $272 billion in Treasury purchases and $68 billion in MBS purchases just last week alone, already using up $340 billion of its $500 billion allotment – which did little to stem the markets from plunging.
The Fed has effectively created its own limitless slush fund with no accountability to anyone and no Congressional oversight. During the financial crisis, the Fed secretly funneled over $29 trillion to Wall Street banks and trading houses, hedge funds, foreign global banks and central banks while fighting a multi-year court battle to keep secret just who got the money. It took two federal courts and a rejected appeal by the U.S. Supreme Court, along with a Congressionally-mandated audit by the Government Accountability Office to pry that information from the grip of the Fed.
The Fed’s slush fund comes on the heels of news last evening that U.S. Treasury Secretary Steve Mnuchin attempted to stuff his own $500 billion slush fund, with no oversight, into the fiscal stimulus bill being deliberated by Congress. Multiple Congressional Democrats went on CNN to decry the attempt and explain why they had rejected the proposed bill…