"The Federal Reserve System - is the central banking system of the United States. This system was conceived by several of the world's leading bankers in 1910 and enacted in 1913, with the passing of the Federal Reserve Act. The passing of the Federal Reserve Act was largely a response to prior financial panics and bank runs, the most severe of which being the Panic of 1907.
A zombie bank - is a financial institution that has an economic net worth less than zero but continues to operate because its ability to repay its debts is shored up by implicit or explicit government credit support."
Well apparently the Bloomberg News has given us another reason to get rid of the Federal Reserve. Lost in all the noise surrounding the "The Patient Protection and Affordable Care Act" we have some news on financial reform. On March 19, Bloomberg won its lawsuit against the Federal Reserve for information that could expose which "too big to fail" banks in the United States are zombie banks not dead just merely rotting.
Bloomberg is fighting for transparency at both the Federal Reserve and the financial sector. So you think $700 billion for the (TARP) bailout bill passed with bipartisan support is a big deal? Well it is just small potatoes compared to the estimated $2 to $3 Trillion flowing from the printing presses out the back door of the Federal Reserve into the too big to fail banks to artificially prop up the financial system at the beginning of the economic collapse in September 2008.
In November 2008, Bloomberg filed a Freedom of Information Act request asking the Fed which of the failing institutions were receiving the money, how much, and what collateral was being used for these loans, based on the argument that when trillions of taxpayer dollars is being loaned out to failing institutions the taxpayer has a right to know the chances of being paid back.
When the Fed thumbed its nose to the request, Bloomberg sued in Federal Court and won, but the Fed appealed. A three judge appellate panel dismissed the Fed's argument and said that the public deserved answers.
Ben Bernake started his new term as Fed Chair after a rocky confirmation fight and pledged openness and transparency. He was quoted saying. "It is essential that the public have the information it needs to understand and be assured of the integrity of all our operations, including all aspects of our balance sheet and our financial controls,"
The law says that the Fed is only to take investment grade assets as collateral. Is the Fed stonewalling to hide the fact that it broke the law by accepting the toxic assets of these institutions as collateral?
Or is the Fed hiding the secret assistance it provided to these failing institutions because it would surface how many of these Wall Street institutions really are zombie banks, kept alive only by accounting tricks.
We the people deserve answers, this money does not belong to the Fed. It is the people's money and we have a right to know where more than $2 trillion of the people's money has gone.
Mr. President you and Mr. Bernanke must live up to your pledges of transparency. Abandon your lawsuit and open the doors and the books on the Federal Reserve.
Peace, liberty, and Prosperity through intelligence, strength, and integrity.