Bailing Out European Banks: Bernanke and Fed Deceived Congress
Earlier this month, Federal Reserve boss Ben Bernanke told senators the cartel has no intention of bailing out European banks. Bernanke told lawmakers that “he doesn’t have the intention or the authority” to bail out countries or banks.
Now we learn that the Fed is indeed in the business of bailing out European banks. It is secretly using a “temporary U.S. dollar liquidity swap arrangement” with the ECB and the central banks of Canada, England, Switzerland and Japan.
“The Fed’s latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed,” writes Ron Paul. “Under current law Congress cannot examine these types of agreements. Those who would argue that auditing the Fed or these agreements with central banks harms the Fed’s independence should reevaluate the Fed’s supposed independence when the Fed bails out Europe so soon after President Obama promised US assistance in resolving the Euro crisis.”
The Fed has a reputation for secrecy. Bloomberg News sued the cartel to obtain information on its emergency programs during the 2007 to 2009 financial crisis. Bloomberg, however, excluded foreign-currency liquidity swaps because names of commercial banks that borrowed under the program were disclosed to the public.
The latest action by the Fed reveals that fiat money created out of thin air is the problem. “Fiat money caused this European crisis and the financial crisis before it. More fiat money is not the cure. The global fiat currency system has proven itself a failure, we need real monetary reform. We need sound money,” Ron Paul concludes.
Bernanke refuses to tell the American people where the money went: