September 3, 2012

Shocking! Fed Audit Reveals 16 Trillion Given Out In Only 30 Months

What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010. Virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.

The List of institutions that received the most money from the Fed in a detailed article HERE
Details of the overwhelming bipartisan House Vote for the Rep. Ron Paul (R-Texas) Bill to Audit the Fed HERE

Posted by Rob at September 3, 2012 3:21 PM

good luck trying to get that back!!

As far as i can see for me even here in canada it's over it is all over finished .

How can this go on any longer with out serious blood shed and chaos ?

No one will ever own up to it , even when found they will not face prosecution/execution.

looks like iti s time for a big world war the wars to end all wars .........and humanity period.

This is crazy even if half of it is true even if it is only 8 trillion even if it is only half of the countries and banks quote sarah palin "W.T.F."

anyone have any solutions to this ?

Posted by: paul in calgary at September 3, 2012 3:36 PM

This is an incredible story if true. It is hard to comprehend the Federal Reserve giving/lending money to anyone without congressional approval. At the very least the President would know. Once again, if true as I doubt it, this story will have a tremendous impact on the November election.

Many of the beneficiaries listed are already on shaky ground. Everyone should realize that world finance is a house of cards. This is proof.

Posted by: ct at September 3, 2012 3:39 PM

Old news. The audit was released last summer to the sound of crickets.

Posted by: PB at September 3, 2012 3:59 PM

This story is from a July 2011 report at:

Posted by: chris c at September 3, 2012 4:01 PM

Remain Calm, people.
The underlying story is VERY BAD, but NOT nearly as bad as it appears in the headline numbers.

The ACTUAL "Term-Adjusted" Total of these loans is ~$1.139 TRILLION, as shown in Table 9 on pages 132 and 133 (totals on 133).

The larger numbers in the headlines include daily borrowings, AGGREGATED when rolled-over another day. In GAO words:

For example, an overnight PDCF loan of $10 billion that was renewed daily at the same level for 30 business days would result in an aggregate amount borrowed of $300 billion although the institution, in effect, borrowed only $10 billion over 30 days.

In contrast, a TAF loan of $10 billion extended over a 1-monthperiod would appear as $10 billion.

As a result, the total transaction amounts shown in table 8 for PDCF are not directly comparable to the total transaction amounts shown for TAF and other programs that made loans for periods longer than overnight.

HENCE, they created Table 9. Makes me wonder if these nimrods are really just socialist WAITERS, (paid by the table, regardless of the quality of their work).

I myself applaud the Audit The Fed efforts, but the REALITY IS BAD ENOUGH; there's no need to weaken the argument by misuse of the data (and PS, shame on the OMB for a truly MORONIC Table 8; who ARE these idiots?).

Posted by: hareynolds at September 3, 2012 4:08 PM

@hareynolds: Thanks for you comment. It is helpful. I tried to read the report but my eyes glazed over after about 10 pages and I couldn't go on. It's no surprise then that I didn't get to Table 8 on page 144 or table 9 on page 145.

International finance is complicated. Did the Fed save the world from a truly great depression or even collapse? Maybe. Who really knows. Very much over my level of understanding..........

Posted by: David in Michigan at September 3, 2012 4:59 PM

I too was wondering if they used aggregated loans. Also many of these loans are extremely short term.

Posted by: AllanS at September 3, 2012 5:03 PM

Addendum to my previous comment: Tables 8 and 9 actually are on pages numbered 132 and 133 but are 145th and 146th of the PDF.

Posted by: David in Michigan at September 3, 2012 5:05 PM

ct - it's true
PB - it happened July 26, 2012 - was that last summer?
chris c - did you get the year wrong or did you link to another 'report'?

Here is a link to the 2012 report:

international finance is hard. Theft from taxpayers via the secret Fed is not hard. Every citizen who has ever paid a dime in taxes should be outraged. Trillion is a big number - this theft involved trillions.

Posted by: Jema54 at September 3, 2012 5:10 PM

Well I don't know about you folk but I'm going to donate the .02 cents in interest I received last month back to the Fed's to help out!

Posted by: Hy Interest at September 3, 2012 5:14 PM

¢2!? You must have one of those high-interest savings accounts.

Posted by: andycanuck at September 3, 2012 5:20 PM

Obama can't be kicked out soon enough. Why are Americans funding foreigners with their own money?
Hes put the USA in the dog house with more baksheesh than even a World war would cost. One wonders how much of this cash ended up in friends back pockets with such large sums being thrown about?

Posted by: Revnant Dream at September 3, 2012 5:50 PM

When there is more money, then assets...that is called banckrupcy. We are hooped...

Posted by: tirador at September 3, 2012 5:53 PM

Jema54, Audit was 2011.

What passed this year was a bill calling for a more in depth audit. The first audit dealt only with emergency credit programs.

Posted by: PB at September 3, 2012 6:05 PM

Mohammed audits O's "transition to democracy,".

Moh relieves O of $1B.

"U.S. Prepares Economic Aid to Bolster Democracy in Egypt ($1B to MuzBro from Hussein and Huma)"

"Nearly 16 months after first pledging to help Egypt’s failing economy, the Obama administration is nearing an agreement with the country’s new government to relieve $1 billion of its debt as part of an American and international assistance package intended to bolster its transition to democracy, administration officials said."

Posted by: maz2 at September 3, 2012 6:59 PM

IzZatSo? Dept: Not Surprised.

>>> "Conservatives who consider Obama a thinly disguised Leninist will be surprised that liberals have grown disenchanted with their onetime hero."


Not Surprised.

It was foretold here before the O'lection: "Sam Vaknin, Ph.D. - 8/13/2008"

"This is his sole legacy: a massive post-traumatic stress disorder."

"The "small people", the "rank and file", the "loyal soldiers" of the narcissist - his flock, his nation, his employees - they pay the price. The disillusionment and disenchantment are agonizing. The process of reconstruction, of rising from the ashes, of overcoming the trauma of having been deceived, exploited and manipulated - is drawn-out. It is difficult to trust again, to have faith, to love, to be led, to collaborate. Feelings of shame and guilt engulf the erstwhile followers of the narcissist. This is his sole legacy: a massive post-traumatic stress disorder."

Posted by: maz2 at September 3, 2012 7:14 PM

OK. Time to close. Sorry! Wrong thread. Too many tabs open.

Posted by: maz2 at September 3, 2012 7:17 PM

Re-elect Obama.

A chicken in every pot, a trillion in every bank!

Posted by: Overburdened Taxpayer at September 3, 2012 7:32 PM

Ah yes, the Beast from Jekyll Island again. Designed to be autonomous; run by bankers for bankers.
But who cares? It's much ado about nothing - or rather, a whole bunch of zeros.

Posted by: John Lewis at September 3, 2012 8:14 PM

It now seems obvious that at least some of the USA
subprime mortgage trash taken up by some domestic
and overseas banks came with a Fed "make whole"
guarantee. That is truly scary and likely corrupt.

Posted by: Sgt Lejaune at September 3, 2012 8:32 PM

Well it's not like they gave out real money. Let's face it, the US is broke, it has to borrow just to run the government. They only pretended to hand out the cash, and the recipients pretended to receive it. Why all the self-deception? Becasue otherwise they'd all have to admit the truth, which is that they're all bankrupt and in default. As long as they can pretend they have the cash, they can put off the day of reckoning while praying to God (that they don't believe in) for a miracle (that they also don't believe in) to save them from the consequences of their irresponsibility.

Posted by: Dirtman at September 3, 2012 9:00 PM

Further to hareynolds, 4:08p.m. --

Have a look also at Figure 11 on page 150 of the PDF. It appears that lending under the emergency programs reached its peak pretty close to the $1.139 trillion in December, 2009, really ramping up starting in September of that year (coinciding with the onset of the financial crisis disclosed to the public by President Bush, Secretary Paulson and Chairman Bernanke). It further appears that the last of the funds were repaid (I'm guessing, or otherwise unwound) by July, 2011, if I've got that right.

I'm wondering if the Fed didn't act on an interim basis with these emergency programs while awaiting Congressional approval of TARP, proposed to Congress by President Bush (TARP being the more permanent replacement for the emergency programs). If this were the case, that would certainly cast a very different light on whether or not the Fed "went rogue", as the sensationalism around this story seems to suggest.

I do find it surprising, though, that the Fed jumped in to provide liquidity to foreign banks, particularly in the UK and Germany. I'd be curious about the legality of and mechanisms used to accomplish these measures. A full public examination of how the programs operated, in light of the GAO report, is certainly in order.

Pending the outcome of that examination, I think we should forebear on jumping all over Obama on this and having it come back to bite us on the behind -- he's got lots to account for already. Similarly, I think we ought to forego the high-fiving on the brilliance of Ron Paul and not use this item as evidence that we need to re-fight the Republican nomination race (apparently, there are some who want to; the last time I checked, Mr. Paul lost fair and square). We need to win in November -- let's stick to the facts and not get sidetracked.

Posted by: David Southam at September 3, 2012 9:19 PM

The real concern is that most of the market commentary is sourced from economists who work for the beneficiaries of the Fed's largess. It's hard to know what's what. When that happens, the markets factor in a significant discount to account for the lack of trust in the numbers.

In finance, trust is everything. This is a very serious problem indeed.

Posted by: Scott at September 3, 2012 9:59 PM

I cannot believe this because it is so unbelievable but it is apparently true.

What, precisely, was the plan - to loot the US Treasury? Oh, wait ...

Posted by: Robert of Ottawa at September 3, 2012 10:12 PM

So besides gold, ammo, what should the prudent investor invest in?

Bullet proof vest?
Okay. What else?

Posted by: eastern paul at September 4, 2012 12:38 AM
$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland.

What a coincedunk! The US Debt clock is just about to click over to the $16 trill mark any time now, perhaps during the DNC.

Posted by: foobert at September 4, 2012 3:11 AM

This Fed, under Ben Bernanke, is an arm of the Obama administration. They have gone far beyond the authority granted in legislation.

It's typical of the left to characterize the Fed radicalism as saving the world, when in fact what they have actually done is deprived American senior citizens of hundreds of billions of dollars of income ( many invest in Treasurys, and CD's).

Could anyone tell me what offsetting benefit was gained that could justify this legalized theft from older Americans, who saved their entire life on the foolish assumption that their savings would actually provide them some income to supplement their Social Security.

The sooner Ben Bernanke can be kicked to the curb, the better. Is it any coincidence that Ben is the appointee of the incompetent in the White House.

I thought Barry was going to end bad Bush policies, not extend them.

Posted by: small c conservative at September 4, 2012 5:16 AM

David Southam said, "Similarly, I think we ought to forego the high-fiving on the brilliance of Ron Paul and not use this item as evidence that we need to re-fight the Republican nomination race (apparently, there are some who want to; the last time I checked, Mr. Paul lost fair and square)."

The delegates were denied the win by the RINO's changing the rules midstream, THEY CHEATED. Makes me wonder how many of them are hiding at the DNC behind a burka or wearing a occupy mask.

Posted by: FREE at September 4, 2012 9:52 AM

"The delegates were denied the win by the RINO's changing the rules midstream, THEY CHEATED."

In my view, that attempt to stifle and discredit legitimate delegates should have been beneath the Republican Party. The media ignored it.

Posted by: chutzpahticular at September 4, 2012 10:48 AM

Obamba needs to take the family on another lavish vacation, somewhere exotic where he can bow to a new king.

Anyone who thinks that nothing bad will come out of all of this needs their head examined.

No Empire corrupts their treasuries and military to the point of freefall and survives for long. The debt and decline is far more than the waning American taxpayer could ever possibly support. First and foremost they gave their manufacturing and production away to the third world, while half the country now survives of some form of government support.

Was it a deliberate agenda or stupidity? Doesn’t really matter anymore, at best in coming decades the US will be a crime infested ghetto with a few pockets of high security wealth not unlike Argentina in the 1990’s.

Posted by: Knight 99 at September 4, 2012 12:00 PM

"small c", you misread Ben Bernanke's intentions and masters. Bernanke isn't an Obama puppet - he was first appointed by Bush. He's a puppet of the ***BANKERS***. Every action he has taken, takes today, and will take in the future, serves the interest of the big banks. Nobody else. He will bail out big bank after big bank and not give a damn what those bailouts do to the value of the dollar. He'll hold interest rates at zero for as long as it takes for the banks to earn themselves out of their black-hole balance sheets, and not give a thought to the American seniors whose savings he is destroying, nor will he a give a thought to the broader economy. Oh, he'll SAY he's acting to help the economy, but it's just blather to cover for his true masters.

The Federal Reserve serves the banks. That's all it does. That's all it has ever done. By now it is such a thoroughly corrupt institution that it ought to be nuked from orbit along with all the big banks it serves.

Posted by: I.M. at September 4, 2012 1:48 PM

'Pending the outcome of that examination, I think we should forebear on jumping all over Obama on this and having it come back to bite us on the behind' umm hum. Posted by David Southam @ 9:19.

Mitt likes Ben, David. Mitt says Ben is doing a 'good' job and that if he were President he would not investigate the Fed. Why? Reread your own quote).

As FREE, Chutzpahiticular and Knight99 said above..things that make me go 'hummm'?, and should make everyone wonder why Dr. Paul was silenced at the GOP 'coronation party'.

BTW, Did Mit mention the US Constitution? I did not hear his speech.

Posted by: Jema54 at September 4, 2012 4:46 PM

The Federal Reserve serves the banks. That's all it does. That's all it has ever done. By now it is such a thoroughly corrupt institution that it ought to be nuked from orbit along with all the big banks it serves.
Posted by: I.M. at September 4, 2012 1:48 PM

Right you are I.M. - Divide and Conquer - play the blame game; don't listen to an individual standing on his/her own two feet demanding accountability from his/her 'team leader'- an old tactic that just keeps on working for the people hating 'elites'.

Posted by: Jema54 at September 4, 2012 4:54 PM

Jema54, 4:46p.m. --

With all due respect (which is very great on my part -- I happen to admire your writing and those of the other contributors you mention), I stand by my position: the story, as reported, appears to me to be substantially inaccurate and sensational -- to the point that it resembles, quite frankly, the plastic-turkey-in-Baghdad-at-Thanksgiving story in 2003 and the Dan Rather junk about GWB's military record. IMO, it creates no value for any of us to get involved in extrapolating, connecting the dots, etc. from an initial position that makes no sense. Doing so actually redounds to the benefit of our opponents, which surely we can agree we do not want.

Without the slightest hint of malice, the best thing that can be said about Ben Bernanke is that he reacted extraordinarily well in his first crisis, and that everything he has done since involves his trying, with every good intention, to relive that moment, with systematically negative results. Is it time for him to go? Yes. Would it be wise for Mitt Romney to say that on the campaign trail? I leave it up to you to decide.

As for Ron Paul, count me among his supporters of sound money policies and monetary policy transparency, which I always have been. As far as popularizing monetary policy principles, I continue to be amazed by who among my friends and neighbours follow Ron Paul, here in southwestern Ontario. But, could he beat Barack Obama? And is it worth trying to relive that moment? I also leave that up to you to decide.

Posted by: David Southam at September 4, 2012 7:41 PM