Because of pressure from Ron Paul, Jim DeMint, and Bernie Sanders, the GAO was forced to do a partial audit of the Federal Reserve and make the results public. Not a full audit, just a few of more egregious details.
And, (drum roll)….
The Federal Reserve, between 12/07 and 6/10 “loaned out” $16 trillion at 0% interest to banks, corporations, AND governments throughout the world. More than our yearly GDP ($14.12 trillion). More than our national debt ($14.5 trillion). This money was created out of thin air, as the Federal Reserve does not actually have $16 trillion sitting around that needs to be put to some sort of work. The reason that they did this was that the only other alternative was that big things in the economy of the world were going to start collapsing and threaten to pull everything down with it. These are not stupid people. Nor argueably evil although one could make a case for this with their particiaption in perpetuating such a system. They did this because they are trying to keep things from crashing.
What this has done is make the “Quantitative Easing” program and the unstimulating “Stimulus” program look like child’s play. All of the money that currently exists in the world, all of the funding in all of the countries economies in the whole friggin’ world was about $67 trillion. Chasing a fixed quantity of goods and services. Now, shazam, all of the money in the world has magically suddenly become (67 plus 16) $83 trillion. Which means that it has taken a hit in value over that time of (a decline of 16/83 or 0.192) almost 20%. Way more than the little numbers that they had let us see that the QE1-2-3 were doing to us. The Federal Reserve has levied a universal tax on any commodity that trades in dollars by making the dollars worth less, and none get hit so hard as Americans, because the assets that dollars buy are effectively priced 20% higher.
And the reason for doing this is that they have a great fear that the whole shebang is going to collapse and that this will keep it going for now. For a little while longer. The problem is that last “for now” part. Because there still is no end game. There still is no solution that gets us out from under our own coming bill (probably over $200 trillion). The Federal Reserve fought tooth and nail to keep their efforts a secret, lest you lose confidence. Hardly seems worth letting things implode for a measly $16 trillion when the real problem is more than 10 times bigger.
They do not want it widely known how close things are to collapse. Still. And Ben Bernanke, that 1600 SAT scholar, a nerd’s nerd and money wonk, admitted in an interview that he really does not have any good idea on how to prevent this collapse from happening. Kind a makes Presbo’s little $5 trillion seem almost insignificant. When Rome seems about to catch fire irregardless, making a little fiddle music is maybe not a terrible choice.
Remember in the African Queen where they were tearing up the boat to keep it running for a little while longer at the end?
How long can you tread water?