The Fed has created the largest Ponzi Scheme in history

The Federal Reserve: The Biggest Scam In History
(Photo credit: CityGypsy11)

Mitch Feierstein, Author, 'Planet Ponzi'
Loose money in the past, loose money guaranteed into the future ... but that's still not enough. The Fed has enlarged its balance sheet by $2 trillion since the crisis began to unfold. But that doesn't even say it. The unelected officials at the Fed handed out an extraordinary $16 trillion in secret loans to bail out banks and businesses in the 2008-10 period. Those loans were not known to, or authorized by, Congress and many of the recipients were firms owned and headquarter abroad. Sen. Bernie Sanders, who has much to call attention to these issues, comments, 'No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president.' Well, duh! It's frankly extraordinary that there should be any question about this.

As Sanders also points out, the actual operation of the bailouts was largely outsourced in large part to investment banking firms on Wall Street who benefitted directly from the bailout. According to the Government Accountability Office, some two-thirds of such outsourcing contracts were awarded on a no-bid basis, an extraordinary failure. And meantime in a 'money-laundering' style operation, the Fed is acquiring $40 billion of low-quality mortgage backed securities - in many cases from the firms that created and missold them - thereby cleaning corrupt balance sheets at the risk of the US taxpayer.

The problems created by this unconstitutional misconduct go far beyond the mere trillions of dollars involved. The US Treasury market is being currently manipulated on a heroic scale. At times we've seen the Fed buying as much as 70% of US government bond issuance. Worse still, it's effectively told the market that it intends to continue supporting the market as much as necessary for as long as necessary. In effect, we have a tiny group of unelected officials pursuing a set of radical and experimental policies - QE infinity, money-printing, unlimited bond buying, call it what you will.

And the theory behind this activity is simply crazy. When have price controls and state intervention ever worked? I don't just mean for the US Treasuries market, but for any major market at any time? State intervention always fails. The Fed is simply setting up what looks set to be the largest Ponzi Scheme in history. Read more >>

Government Motors: Feds expand fleet of cars to 449,000 vehicles

Budgets may be tight, but the federal government has increased its fleet of cars to 449,000 vehicles — or nearly one for every seven federal employees — according to the Government Accountability Office.

The Department of Veterans Affairs saw the biggest jump, adding 49 percent more vehicles between 2005 and 2011 — or even more than the Homeland Security Department, which was new in 2005 and has steadily grown since, including doubling the size of the U.S. Border Patrol. Read more  >>

Federal Reserve Board Members Gave Their Own Banks $4 Trillion in Bailouts

Following the 2008 financial crisis, the Federal Reserve provided more than $4 trillion in near zero-interest loans and other help to banks and businesses whose executives also served as directors for the national bank.

At least 18 current and former Fed regional bank directors had a direct stake in the trillion-dollar bailout given to teetering institutions, according to a report produced by the Government Accountability Office, but released by Senator Bernie Sanders (I-Vermont).

“This report reveals the inherent conflicts of interest that exist at the Federal Reserve,” Sanders said in a prepared statement. “At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks.” Read more >>

There are striking similarities between America’s current situation and the factors that brought down Rome

Image by Giampaolo Macorig via FlickrIs America On A Burning Platform?

Jim Quinn of The Burning Platform

David Walker, the former Comptroller of the United States from 1998 until 2008, has been warning politicians, the media, and the American public for over a decade that we are off course and headed for disaster. In August 2007, before the financial system meltdown of 2008, Mr. Walker declared:

The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon. There are striking similarities between America’s current situation and the factors that brought down Rome, including declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government. The fiscal imbalance meant the US was on a path toward an explosion of debt. With the looming retirement of baby boomers, spiraling healthcare costs, plummeting savings rates and increasing reliance on foreign lenders, we face unprecedented fiscal risks. Current US policy on education, energy, the environment, immigration and Iraq also was on an unsustainable path. Our very prosperity is placing greater demands on our physical infrastructure. Billions of dollars will be needed to modernize everything from highways and airports to water and sewage systems. More...

Fraud in home buyers' tax program includes IRS employees and 4-year-olds

I can't wait to see the myriad of scams erupt in healthcare reform. It's all downhill from here. All that remains of this country is waste water -- a giant cesspool of corruption.

By Dina ElBoghdady
Washington Post Staff Writer

Hundreds of millions of dollars may have been paid to people who fraudulently or mistakenly took advantage of a lucrative tax credit for first-time home buyers, including some who were employees of the Internal Revenue Service and even children, an IRS watchdog told a House panel on Thursday.

The findings, documented in a report by the Treasury inspector general for tax administration, come as debate heats up in Congress over whether to extend the $8,000 tax credit beyond its Nov. 30 deadline.

While the report alarmed lawmakers, supporters of the tax credit on Capitol Hill pressed forward with efforts to keep the refund alive. Senate Majority Leader Harry M. Reid (D-Nev.) is working on a proposal to extend the full $8,000 credit for four months and then gradually phase it out by the end of next year, according to his office.

Meanwhile, experts who are closely tracking the existing program say it's unlikely that the report released Thursday will undermine efforts to extend the credit given the bipartisan support it has received, especially from lawmakers representing states heavily hit by foreclosures. These lawmakers say the tax credit has helped boost home sales.

"There are simply too many Democrats and Republicans that want to see this program extended for it to get derailed by the inspector general's report," said Jaret Seiberg, a policy analyst at Washington Research Group.

4-year-olds claimed credit

The report found that more than 19,300 people claimed a total of $139 million on their 2008 tax returns before purchasing a home even though the law requires the purchase to take place first, J. Russell George, the inspector general, told a House Ways and Means subcommittee.

Nearly 74,000 buyers -- including some IRS employees -- claimed a total of $500 million in tax credits despite indications that they may have owned a home before, George said. The law bans people from getting this credit if they have owned a home in the previous three years.

Even children claimed the tax credit, said George, adding that 580 taxpayers under age 18 -- including some 4-year-olds -- claimed $4 million, presumably so their parents could dodge the income limitations imposed by the program.

George went on to criticize the IRS for not requiring buyers to attach documents that verify when they purchased their homes, something his office has been advocating. The IRS's deputy commissioner for services and enforcement, Linda E. Stiff, said the agency does not have the ability to accept such documents electronically, nor does it have the legal authority to disallow a claim if the documents are not attached, which would make such a requirement moot. Lawmakers indicated they would look into granting that authority.

Both Stiff and George said that there's a chance that some of the suspicious tax credit claims may prove to be legitimate once they are more thoroughly examined.

About 1.4 million households have claimed nearly $10 billion in tax credits as of Aug. 22, and about 60 percent of them had adjusted gross income of less than $50,000, according to a Government Accountability Office report also released Thursday.

Stiff said all those claims have been resubmitted through a computer filter designed to catch potential problems. As a result, the IRS has identified more than 160 potential tax credit schemes that have resulted in scores of criminal investigations, and the agency has selected for reexamination 107,000 claims, some of which have been frozen. More...

The FED Threatens Congress

The FED threatens that if Congress dare review FED actions, the whole country will fall apart -- sound familiar? Ron Paul has the support of more than half of the House of Representatives for a bill that would audit the Fed’s monetary policy decisions. Paul wants to prevent the Fed being "secret and clandestine and serving special interests”.

Remember, the FED is the core of all U.S. financial problems. As Ron Paul stated to the U.S. House of Representatives in 2002, "From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble...every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial 'boom' followed by a recession or depression when the Fed-created bubble bursts".


The Federal Reserve is one of the most powerful and secretive institutions in Washington, long considered beyond the reach of lawmakers. But now, as details emerge of how the Fed secretly doled out more than a trillion dollars during the financial crisis, a rare bipartisan movement in Congress demands that the Fed be held accountable.

There is a monumental power struggle taking place. The "O Team" wants to increase FED power to unprecedented levels despite the FED's obvious mob-like dictates to its field soldiers like Bank of America and the ordered takeover of Merrill Lynch.

Get a load of Donald Kohn's (vice-chairman of the US Federal Reserve) ludicrous and impudent justification for maintaining FED secrecy:

"Although Federal Reserve officials regularly explain the rationale for their policy decisions in public venues, the process of vetting ideas and proposals, many of which are never incorporated into policy decisions, could suffer from the threat of public disclosure," Mr Kohn told a House Financial Services subcommittee.

"If policymakers believed that (Government Accountability Office) audits would result in published analyses of their policy discussions, they might be less willing to engage in the unfettered and wide-ranging internal debates that are essential to identifying the best possible policy options.”

Ask yourself why that is? What have they got to hide? Who do these people think they are?

Paul has the FED up against the wall for now but I doubt his efforts will stick. The FED will most likely browbeat Congress into submission with fear tactics as Hank and friends did in the past. Better yet, many in Congress already know what the FED is up to and are complicit. The whole system is corrupt to the core; people are so accustom to the corruption, no one even bats an eye anymore. In fact the dismal weight of fascism and mass lethargy is growing so pervasive, I feel as if I'm living within Orwell's novel 1984.

Ilargi summed the situation up beautifully: "The idea that government agencies, who arguably have the best access to data, use that access to distort those same data, seems so intertwined with how society functions these days that not only are there hardly any protests, there's not even much surprise. And that, let me say it once again, depicts an all-out political crisis".