Will Fed Waste & Abuse Finally Get Attention Too?

Americans got an eyeful of the waste and fraud rampant in federal spending last week.

Bullion.Directory precious metals analysis 03 February, 2025
By Clint Siegner
Director of Money Metals Exchange

While the headlines scroll by and the reform effort enters full swing, there is one quasi-federal institution which has somehow dodged pretty much all accountability for more than a century.

There may be no organization which can compete with the Federal Reserve Bank when it comes to waste, fraud, and abuse. While the nation is focused on making reforms, the Fed cannot be overlooked.

Let’s review…

The Fed principally serves the interests of its formal owners, i.e. Wall Street banks. The central bank also facilitates taxpayer-funded bail-outs for undeserving banks.

The infamous Trouble Asset Relief Program (TARP) provided about $650 billion to the shady banks behind the 2008 Financial Crisis. The bankers responsible wrote and then resold NINJA (No Income No Job) loans and were richly rewarded, even as Americans at large suffered through the worst economic crisis since the Great Depression.

Courtesy of the Fed, Wall Street enjoys a sort of immunity which is greater than that of the vaccine manufacturers. A pharmaceutical company which sells an experimental vaccine often cannot be sued, but they can still fail for other reasons. The largest banks – designated as Globally Systemically Important – aren’t allowed to fail for any reason.

Direct handouts to banks are by no means the only charity that Wall Street receives from the Fed.

There are lots of hidden giveaways. For example, when the Fed monetizes U.S. debt (a travesty in its own right), it doesn’t just print money and send it directly to the Treasury Department in return for Treasury bonds. It lets bankers skim a commission by letting them act as middlemen.

Through that monetization mechanism along with the setting of short-term interest rates below the true market price, the Federal Reserve is also responsible for the catastrophic decline in the purchasing power of the U.S. dollar.

Prior to the creation of the Fed in 1913, Americans enjoyed stable, even falling, prices. Today the dollar buys less every year – and sometimes a lot less. Adding insult to injury, Fed officials try to convince citizens that it is normal and healthy for their currency to perpetually fall in purchasing power.

The Fed is the chief regulator for U.S. banks, and it has failed utterly when it comes to keeping them honest.

No CEO of a major bank was criminally prosecuted for the fraud which came to light after the 2008 financial crisis.

The lack of oversight must have been encouraging to bankers who seem only to have grown more brazen.

Wells Fargo was found guilty of creating phony new accounts for clients and sticking them with extra fees. Traders at JPMorgan Chase and other banks were convicted of rigging the silver markets. The rap sheet is long and terrible, yet the Fed never suspends a major bank’s trading privileges or access.

The “revolving door” form of regulatory capture is as much a problem at the Fed as it is at the SEC and other agencies. Fed staffers responsible for oversight regularly take high-paid positions with one of the banks they used to “watch.”

The economic distortions created by our central bank have been more devastating in terms of cost than anything else.

The American dream itself is almost out of reach for most young people. Housing prices have been massively inflated by nearly two decades of artificially low interest rates. Wages have not kept pace with inflation. And the Fed has been instrumental as the buyer of last resort for federal debt – supporting perpetual deficits.

The awful truth is these offenses are just what we know about. Not once in its 112-year history has the Fed undergone a complete audit of its activities and expenditures.

America’s central bank is even less accountable than the CIA.

It does not provide a comprehensive report of activities to the president or Congress, and its officials fight vigorously to avoid oversight whenever it comes up.

This article was originally published here

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