Ben Bernanke did not have time to celebrate his reappointment for another 4 years as Federal Reserve chairman on Tuesday. The day before US president Barack Obama decided to keep Bernanke as Fed head information provider Bloomberg dropped a new bomb shell regarding a lawsuit initiated by the news agency under the Freedom Of Information Act (FOIA) against the Fed.
Bloomberg requires the Fed to publish who got the $2 Trillion in bank aid. Find all the details of the pending lawsuit in this post from November 7, 2008.
The Fed appealed this FOIA request last December, citing concerns that this information would endanger the borrowers of the $2 Trillion.
In a response to Bloomberg it then said,
"The U.S. is facing "an unprecedented crisis" in which "loss in confidence in and between financial institutions can occur with lightning speed and devastating effects."But on Monday Bloomberg scored a second goal against the Fed:
Manhattan Chief U.S. District Judge Loretta Preska rejected the central bank’s argument that the records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions. The collateral lists "are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression," according to the lawsuit that led to yesterday’s (Monday) ruling.The secretive Fed, a constitutionally questionable institution due to its hybrid public-private status has also come under fire from Republican Congressman Ron Paul who tries to win a majority in Congress and the Senate for an official audit of the Fed.
Bloomberg editor-in-chief Matthew Winkler commented the court`s decision this way:
"When an unprecedented amount of taxpayer dollars were lent to financial institutions in unprecedented ways and the Federal Reserve refused to make public any of the details of its extraordinary lending, Bloomberg News asked the court why U.S. citizens don’t have the right to know," he said "We`re gratified the court is defending the public’s right to know what is being done in the public interest."David Skidmore, a Fed spokesman, told Bloomberg the Federal Reserve Board’s staff was reviewing the ruling and declined to comment on it at this time.
This ruling is certainly a milestone in the possible end game of the Fed which has come under fire from all sides due to its policy of showering irresponsible institutional lenders with Trillions while the rest of the economy is teetering on the brink of a major depression, induced by more than 2 decades of loose monetary policy.
Astute observers will remember the blunders of the Fed which does not know where $9.55 Trillion in unbacked Federal Reserve Notes went.
I end this post with the most important question of all: Who Owns the Federal Reserve?
Resolving this question may become the most important task in the coming era where the world will see more economic and political turmoil than ever before in history.
After all Bernanke is only the figurehead. His captains are the unknown Fed shareholders and for the time being the world economy`s fate lies in their hands.
His thank you to president Obama is only a PR stunt; I`d prefer to know who else decided to keep the biggest money printer of all times in the pilot`s seat. Get involved in this: Use the multitude of Fed inquiry forms on the Fed`s website here and mail me any answers you get. My former requests did not lead anywhere, but I am not a US citizen who has a constitutional right to be informed about the government`s actions.
This post has been republished from Toni Straka's blog, The Prudent Investor.