Two for One for Bloomberg Against the Secretive Fed

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 bombshell regarding a lawsuit initiated by the news agency under the Freedom of Information Act (FOIA) against the Fed.

Bloomberg required 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 is trying 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 time 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.

Comments

[Ronald Lewis]

This ruling is a great win for those who fight diligently to defend the U.S. Constitution. My hope is that this development will accelerate the movement to open the Fed's books and expose to the American people what they truly need to know.

2009 Aug 25 08:00 PM

[The Geoffster]

Inquiring minds may force the Wizard to come out from behind the curtain.
www.wnd.com/index.php?...

2009 Aug 25 09:46 PM

[johngonole]

Boy I wish the federal governement would grant me the power to print money and by stuff that yields interest without end.

In all seriousness I would rather have this power private than in the hands of the government. On the otherhand the books should be open and transparent since manipulations of the money supply effect macro economics of our country in a big way.

Now jumping off the deep end what would be really nice would be to have a monetary systems without fractional reserve banking of any kind. Then we wouldn't have any more bank failures, no fed, no federal deficit spending, etc...

2009 Aug 26 12:43 AM

[Jasper M]

A nice win for the side of the angels. But, not to be a downer, they Will appeal this, and who knows if they win?
Historically, the judiciary is Not immune to public outrage, and I can hope that rising discontent will inform any future decisions on this, by the time such an appeal gets argued.

2009 Aug 26 01:56 AM

[FOIA Friend]

Your statement is not correct when it comes to making FOIA requests - U.S. citizenship is not a criteria for making a request or receiving responsive U.S. federal documents. Whoever told you that is wrong. The law states that any person can make a request (and receive responsive documents). If anyone dislikes the law, get congressionally involved to change the law.

2009 Aug 26 01:51 PM