How The Federal Reserve Continues To Conduct Shadow Bailouts


The Federal Reserve is primarily concerned with one thing and that is to protect the interests of the banking industry.  The Fed has no desire or need to protect the underlying economy.  If they can get away with allowing banks to jump from one bubble to another they will do so.  The success of the overall economy is only consequential if it aligns with the deeper interests of the banking cabal.  This weekend former Fed Chair Alan Greenspan mentioned that simply bailing out Greece was a temporary measure.  When pressed he went back into “Greenspeak” and rambled on in his typical obtuse language.  The reason why global banks fear Greece is not because of the country itself, but because the country has billions of dollars in debt that global banks hold.  These banks do not want to pay for their bad bets and would rather shift the cost to the overall population in general.  The Fed balance sheet here in the U.S. is now up to $2.84 trillion, another record that gets no airtime in the press.  The Federal Reserve continues with clandestine bailouts only to protect the interests of the banking elite.


Fed balance sheet reaches $2.84 trillion

federal reserve balance sheet

The Federal Reserve balance sheet is now up to $2.84 trillion.  The Fed has become the silo for shadow bailouts including bailouts for the commercial real estate industry, toxic residential loans, mortgage backed securities, and even loans that have no business being on its books.  Yet all this is seen as providing more liquidity for the banking system in the country.  Since the crisis started four years ago little benefit has been seen in the underlying economy.  Keep in mind the fiscal stimulus which is a fraction of what the Fed now holds on its balance sheet is what many Americans see on infrastructure projects.  The total amount spent since August of 2008 approximates $550 billion (roughly 3 percent of GDP).  On the other hand the Federal Reserve balance sheet specifically targeted to the banks now is up to 20 percent of GDP.

Of course little is discussed in the press about the Fed balance sheet.  The Federal Reserve has specially focused on bailing out the banking sector and this has worked well.  The too big to fail banks are now larger and profits are back to record levels.  Their biggest success was ripping off the public and more specifically have kept most of their hidden secrets buried deep in the belly of the un-audited Federal Reserve balance sheet.  We know that the Fed is holding $2.84 trillion in various “assets” but what exactly is being held?  They would like the public to believe that only pristine assets are being held in exchange for U.S. Treasuries but in reality the Fed is purchasing every questionable asset under the sun.  The Fed is ignoring the needs of the economy and simply focusing on protecting the interests of the banking elite.

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