GAO: Fed Issued $US16 Trillion During 2008 Crisis!
By Staff News & Analysis - July 26, 2011

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," Sanders said in a statement. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else." – Washington Post

Dominant Social Theme: Simply a glitch. The US$16 trillion was issued in good faith by the stewards of the democracy. They were saving the "system." What, you didn't get any of it? Maybe next time …

Free-Market Analysis: With nary a ripple in the mainstream press, the US Government Accountability Office has released an "audit" of the Federal Reserve loan program in 2008 that, according to the Washington Post (see above excerpt) highlights possible conflicts of interest in the issuance of some US$16 trillion. We would bet it's more than that.

The GAO found two things wrong with the "bailout." First of all there were conflicts of interest; second, in making the determination that an emergency bailout was called for, the Fed's leaders imputed powers that probably were not really there. They acted like an entirely private enterprise even though they clearly are not.

The GAO made recommendations that the Fed's top men are vowing to take seriously. But this is a joke. An institution that has in the past several years printed some US$20 trillion or more (including QE 1 and 2) – and no one really knows how much higher it is – is not going to voluntarily limit itself or its actions based on bureaucratic recommendations.

In fact, without the agitation of people like libertarian-conservative Congressman Ron Paul (R-TX), there would have been no audit to begin with. It wasn't something the Fed sought. Even so, the US mainstream press is not exactly providing aggressive coverage. It's not of great import, apparently. That's certainly the dominant social theme.

The meme is being conjured in numerous ways. One way the mainstream press is handling this is by focusing on the conflict-of-interest rather than the impossible numbers involved. Another way is by simply ignoring the issue. We searched Google News for cites and found only 72 articles. This news has received general coverage since perhaps Friday; at the same singer Amy Winehouse's death has received some 6,000 cites.

A search of the general Google queue (not just Google news) turns up nearly 500,000 cites. This is an absurdly skewed ratio. What it means in our view is that the Internet alternative news services (which Google refuses to allow in into its news algorithm) are covering the release while the mainstream is not.

Google, by the way, is continually fiddling with its news presentation and reducing in scope and size the presentation of alternative news. Even five years ago, Google made available a queue of articles from a variety of sources. But today, Google's front page news queue carefully presents mainstream sources first and makes alternative news sources difficult to find. This obfuscation is carried out within the guise of readership service and technology upgrades.

Back to the Fed. The elites are terrified about these numbers. We can tell by the way the dissemination is being downplayed, and we have written about this many times before.

Because of the Internet, the scope of the bailout cannot be concealed. Many people in the US and the Western world are quite aware that while they lost their homes and jobs, central banks were handing out TRILLIONS to the very entities that helped create the financial crisis. You can read an editorial about it here: Anthony Wile – The Morality of Gold.

This is the era of the Internet Reformation. Bankers are being nailed to the wall like Martin Luther's theses. The great, grasping mechanism of mercantilist central banking has been exposed for all to see. The bottom line issue is one of fairness. Comity and civil society are at risk when people feel they are being taken advantage of at a fundamental level.

This excerpt, above, lies at the heart of the unspoken dialogue that has taken place. People continue to do what they need to do survive but the moral construction of the Western economic system has collapsed. It wasn't meant to be this way, but that's how it turned out.

The elites counted on their control of mainstream media to cover-up the reality of the money system (that a handful of people can print as much money as they want whenever they want). But in the 21st century, thanks to the Internet Reformation, they have lost control.

If this were the 20th century, they would have been able to control the message. But in the 21st century they have not been able to do so.

Another way the mainstream media is providing damage control for the Anglo-American power elites that essentially own the central banks around the world is by minimizing the actual news event itself. This article offered by the Washington Post is interesting, too, in terms of its composition It only offers the figure – US$16 trillion – as an afterthought, toward the bottom.

One of the best commentaries we could find on this report was written by the American Dream blogsite. Here is the lede:

A one-time limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act has uncovered some eye-popping corruption at the Fed and the mainstream media is barely even covering it. It turns out that the Federal Reserve made $16.1 trillion in secret loans to their bankster friends during the financial crisis. You can read a copy of the GAO investigation for yourself right here. These loans only went to the "too big to fail" banks and to foreign financial institutions. Not a penny of these loans went to small banks or to ordinary Americans.

Not only did the banksters get trillions in nearly interest-free loans, but the Fed actually paid them over 600 million dollars to help run the emergency lending program. The GAO investigation revealed some absolutely stunning conflicts of interest, and yet the mainstream media does not even seem interested. Solid evidence of the looting of America has been put right in front of us, and yet hardly anyone wants to talk about it. Many Americans have a hard time grasping just how large 16.1 trillion dollars is. It is an amount of money that is almost inconceivable. It is more than the GDP of the United States for an entire year. It is more than the U.S. government has spent over the last four years combined.

Still another compelling summary was provided by Business Insider, which is not exactly an alternative news source, but it does tend to publish a wider variety of news and commentary than the US mainstream. Ironically, the article is written by someone offering a tutorial (a paid course) on how to survive the coming fiat meltdown, but nonetheless, the lede is fairly compelling:

While the world waits with baited breath on the Contrived Drama of the Debt Ceiling, the real show has already been played out, secretly and behind the scenes. The first audit of the privately owned and foreign owned Federal Reserve by the Geishas turned up $16 Trillion dollars of loans all over the world to prop up the global fiat empire. This massive money creation is over and above Hank Paulson's $700 billion dollar heist of the American public.

It is also in addition to QE1 and QE2 that resulted in an illusionary recovery of the economy. All of this money printing has done nothing to create any economic growth and it never will. The scary part is that this was done with no oversight or accountability . (Thank God we have someone like Ron Paul to hold these Elite accountable and expose their crimes before the collapse.)

The writer makes several good points here. The GAO report was released in the dog-days of summer at the height of the "debt-ceiling" crisis. Many of the articles seem to have been written or posted on Friday, which is when anyone in the news business knows is the time when "bad news" is supposed to be disseminated.

Friday is the day to release bad news; Monday, when people's attention spans are refreshed, is the time to release news of consequence. The GAO controls its own news flow. The coverage was surely no accident. In these matters, nothing is. The Washington Post and numerous other mainstream publications – the ones that did cover it – reported on the GAO release from the standpoint of conflict-of interest. But this is not the story. The real story is that a handful of people – already very wealthy – received US$16 trillion while everyone else did not.

Invariably this impossible bailout (it is not possible to conceive of US$16 trillion – which doesn't even include the additional trillions of QE 1 and 2) is cast as a necessary piece of bad business. But it fails to address the reality of what has actually occurred.

Two things have happened: First, people have been made aware as never before of the essential unfairness (not a strong enough word) of the system; second, the massiveness of the bailout (handout) shows clearly that the system itself is finished. The last time something of this magnitude occurred was during the Great Depression and it took a World War to reconfigure and reassert elite control.

Absent another world war (which is impossible because of nuclear devices) nothing is going to bring it back. The price distortions are so great, thanks to the directed money printing, that it cannot unwind. In fact, around the world, central banks are busily printing money for the very elite power nexuses (banks and financial institutions) that need to fail. Those in charge of the money printing will not let them fail. This means the unemployment and misery will continue to grow.

The whole system is insane. It is beyond salvage. Those in power will make the argument that they are "saving" the system; in fact they are the very ones who have destroyed it. Not talking about the ramifications will not make the fundamental issues go away.

After Thoughts

What has been revealed will not be forgotten; gangrenous resentment will continue to grow and spread, eating away at people's willingness to participate in the system as the Internet Reformation rolls on. The elites have no answer except to ignore the larger issue; and thus the dénouement to this sorry saga has yet to be written.