The concepts in this Wall Street Journal article are not understood by most Americans. If they were, it’s hard to believe we would allow it.
Here’s the short version of the latest scheme to lay more debt on the American public.
The twelve Federal Reserve member banks have accumulated almost $93 billion in operating losses. The Federal Reserve can assess those twelve member banks for those losses. That bill is increasing weekly. Four of those member banks have become insolvent. The regional Federal Reserve Bank in Boston is close to insolvency. Five of the remaining seven regional Federal Reserve banks will be insolvent soon.
The Federal Reserve Act empowers the Fed to compel member banks to cover their shortfall.
Instead of requiring each bank to make good on the rapidly increasing losses, the Federal Reserve is shifting the bill to the American taxpayer by raising the consolidated debt. In effect, printing more money.
From the article, “These sums aren’t mere rounding errors, and they shouldn’t be placed on taxpayers’ tab. Federal bank regulators should require Fed member banks that are registered with the SEC and their holding companies to disclose their risks of being called on to prop up the finances of their Federal Reserve district banks.”
It seems a never-ending saga of more debt for each American. This must come to an end!
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