HOW CAN TWELVE UNELECTED BANKERS MAKE $500,000,000,000 IN GOVERNMENT LOANS TO FOREIGNERS?
July 22, 2009 6:00 PM (Washington, DC) – Congressman Alan Grayson on Tuesday questioned Federal Reserve Chairman Ben Bernanke on the central bank’s loans to foreign entities. A clip of this back-and-forth is the 4th most “favorite” news video on YouTube today (with more than 30,000 views in 24 hours). It has sparked numerous blog posts and thousands of public comments about the Federal Reserve’s authority to lend hundreds of billions to foreigners without consulting a single elected official. The clip is located on Congressman Grayson’s YouTube page here:
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Among the highlights:
•At 1:30, Chairman Bernanke can’t say which foreign entities got the money.
•At 3:19, Bernanke says that the 20% rise in the dollar which took place at the same time as the Federal Reserve lent out $500B to foreign central banks was just a “coincidence.”
•At 3:45, Bernanke and Grayson discuss whether there is a Constitutional basis for the Federal Reserve lending a half a trillion dollars to foreigners.
Congressman Grayson said, “According to the Federal Reserve’s own figures, Federal Reserve loans to foreign banks jumped from nothing in September to $550,000,000,000 at the end of 2008. These loans were authorized only by the members of the Federal Open Market Committee, a group of twelve bankers at the Federal Reserve whose deliberations are shielded from public view for five years.
“This amount is ten times the size of the entire State Department budget. Publicly elected lawmakers proposed and debated over 100 amendments to the State department budget. That’s how democracy is supposed to work -- not through secret deliberations in which 12 unelected bankers trample on Congress’s Constitutional authority to appropriate funds, approve treaties, and coin money.
“I find it hard to believe that the power to hand over the half-a-trillion dollars to foreigners was part of Congressional intent in 1913 when the Federal Reserve Act was written. If the Federal Reserve can lend a half a trillion without consulting a single elected official, it is time for a review of the central bank’s ‘swap line’ authority.”
