Courtesy of Pam Martens
By Pam Martens and Russ Martens
Yesterday the Federal Reserve released its “audited” financial statements with the following caveat, among numerous others:
“Due to the unique nature of the Reserve Banks’ powers and responsibilities as part of the nation’s central bank and given the System’s unique responsibility to conduct monetary policy, the Board has adopted accounting principles and practices in the FAM [Financial Accounting Manual for Federal Reserve Banks] that differ from accounting principles generally accepted in the United States of America (GAAP).”
The Federal Reserve is the regulator of the largest bank holding companies in the United States and, since December of 2007, has been shoveling trillions of dollars at the trading houses owned by these bank holding companies almost on a non-stop basis, if you include Quantitative Easing (QE) programs 1, 2, 3 and 4 and the repo loan bailout that began on September 17, 2019 – months before there was any financial crisis due to the pandemic.
As of last Wednesday, the Fed’s balance sheet had climbed to $7.7 trillion (yes, trillion with a “t”) from $959 billion on September 11, 2008, the Wednesday before Wall Street blew itself up along with the U.S. economy as a result of lax Federal Reserve regulation. And the Fed can’t blame that $7.7 trillion on the pandemic because its balance sheet stood at $4.2 trillion on December 25, 2019 before there was any pandemic in the U.S.
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