Fed Loans $500 Billion to Foreign Banks in 2008

Arrogant Fed Chairman Says, "Congress Approved It"

Here is a clip of Congressman Alan Grayson (D. Fl) cross-examining Federal Reserve Chairman Ben Bernanke. Grayson hones in on a Fed Balance Sheet entry showing that the Fed loaned over $500 Billion to foreign central banks.

The Federal Reserve Chairman Bernanke is asked who got the money, and he states he, "does not know." He later says that the half Billion Dollars was distributed to 14 foreign central banks. When asked by Congressman Grayson where the Federal Reserve obtained the authority to loan half a trillion dollars to foreign banks, Bernanke stated it came from "Section 14 of the Federal Reserve Act."

The answer stunned the freshman Congressman. He wrote on a blog entry on his Congressional website:

This amount is ten times the size of the entire State Department budget. Publicly elected lawmakers proposed and debated over 100 amendments to the State department budget. That’s how democracy is supposed to work -- not through secret deliberations in which 12 unelected bankers trample on Congress’s Constitutional authority to appropriate funds, approve treaties, and coin money.

http://grayson.house.gov/

When Bernanke again says he, "does not know" from what provision that Fed authority arises, a Fed lawyer behind him tells him his authority derived from Section 14.

Section 14 of the Federal Reserve Act of 1913, which does allow the Fed an incredible amount of power to make secret purchases "in the open market," does not allow the Fed to make huge, Billion Dollar loans to foreign central banks.

Section 14 of the Federal Reserve Act of 1913 states as follows:

Any Federal reserve bank may, under rules and regulations prescribed by the Board of Governors of the Federal Reserve System, purchase and sell in the open market, at home or abroad, either from or to domestic or foreign banks, firms, corporations, or individuals, cable transfers and bankers’ acceptances and bills of exchange of the kinds and maturities by this chapter made eligible for rediscount, with or without the indorsement of a member bank.

12 U.S.C. § 253 (emphasis added).

Notice that the Fed is limited to transfers that take place "in the open market." The Fed's action here was not taken in the open market. In fact, they were secret transactions between international bankers, including our own Federal Reserve.

In this clip, Bernanke says the $500 Billion of transactions were approved by the Federal Open Market Committee. That Committee of twelve wealthy bankers serves in secret with very limited Congressional oversight. Traditionally, the minutes of that meeting to authorize this huge transaction will not be released to Congress or the public for five years . . . 2013.

Please watch this video. Then, look to the right side of this Blog for the Audit the Fed link, and sign the Petition to Audit the Fed.





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