Tag: Federal Reserve

One of the architects of the audit of the Federal Reserve was former Rep. Alan Grayson (D-FL) who is running for his old house seat. He appeared with Keith Olbermann to discuss the Bloomberg report on the secret no strings, 0% interest $7.7 trillion had out to the banks that they also reaped another $13 billion in profits. As Rep. Grayson points out it is far worse than even the Bloomberg report.

So what does the Obama administration have to say about this? Apparently not a lot. The president is too busy raising campaign money from those who benefited most from this bailout. Obama’s minions on Twitter and in so-called “progressive” blogs have rushed in to defend him against any appearance that he sides with the banks. They ignore the history of the president’s part in the dilution of the Dodd/Frank regulations which has yet to take affect. So here is a brief refresher to keep this based in reality.

Way back at the beginning of Barack Obama’s administration and in the aftermath of the 2008 Wall St/Banking meltdown, financial reform had strong bipartisan support. The original Dodd-Frank Bill contained a provision for regular audits to the end the secrecy of the Federal Reserve. It was introduced in the House by Rep. Alan Grayson (D-FL) and Rep, Ron Paul (R-TX) with strong support from on the Senate side from Sen. Bernie Sanders (I-VT) and Sen. Jim DeMint (R-SC). However, the amendment was opposed by not only Wall St. and the Federal Reserve, it was also opposed by the Obama administration so strenuously that Obama threatened to veto the entire Dodd/Frank bill if the audit was included. That amendment failed and a second one was crafted for the one time audit which was just as adamantly opposed by Obama and company.

Deal Killer? White House Takes Aim At Fed Audit Provision

by Brian Beutler | May 4, 2010,

Possibly today, but if not today then soon, the Senate will decide whether or not to follow the House’s lead and adopt a provision requiring government auditors to open up the books at the Federal Reserve. The measure enjoys a great deal of popularity on both the left and the right, but is so fiercely opposed by powerful interests that it could nonetheless become a stumbling block in the way of financial regulatory legislation.

Right now Sen. Bernie Sanders (I-VT) is trying to round up 60 or more votes to overcome a likely filibuster and include an “audit the Fed” provision in the Senate’s bill. There are just a few small obstacles: the White House, major financial institutions, and the Fed itself. Their resistance is fierce–but the measure is so popular that killing it will be difficult for them and that, in their eyes, threatens to put a grenade at the center of efforts to to tighten the rules on Wall Street. [..]

That’s why, according to the Wall Street Journal they’ll “fight to stop it at all costs.” The White House is hoping to cut off “audit the Fed” in the Senate, so that they’ll have a stronger hand when House and Senate negotiators meet to iron out the differences between their regulatory reform bills. If the Senate bill does not include Sanders’ amendment, then the House will be in a weak position vis-a-vis the Senate and White House and the provision could be easily stripped.

If Sanders prevails, then the White House will be all but out of options and President Obama will likely be left with the choice of vetoing the legislation, or signing it and raising the ire of very powerful people. Stay tuned.

Sanders’ amendment for a one time only audit prevailed and was conducted this past year that has revealed a massive handout to banks. We now know why the Federal Reserve and the banks didn’t want this audit. The question now is what is going to be done to prevent the Federal Reserve from dong this again. It’s fairly obvious what the president’s policy is, he sides with Wall St and the banks, the 1%.

As if we didn’t know that they were all lying through their teeth on the extent of the bank bail out in late 2008, we’ve just never been sure of the price tag of all those lies. Now due to the dogged diligence of Bloomberg News, we have a better picture if what was handed out to the banks with no strings, $7.77 TRILLION. TARP, a mere $750 billion, was just 2% of that and who could forget the squawking from Congress that went on about that paltry sum.

Meantime the Federal Reserve has been fighting to keep the details of the largest bank bailout in US history buried from the public:

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse. [..]

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”

Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.

As expected, Obama’s Treasury Secretary, Timothy Geithner, one of the chief architects of this hand out, fought limiting the size of banks. David Dayen at FDL points this out from the article:

   On May 4, 2010, Geithner visited (former Sen. Ted) Kaufman in his Capitol Hill office. As president of the New York Fed in 2007 and 2008, Geithner helped design and run the central bank’s lending programs. The New York Fed supervised four of the six biggest U.S. banks and, during the credit crunch, put together a daily confidential report on Wall Street’s financial condition. Geithner was copied on these reports, based on a sampling of e- mails released by the Financial Crisis Inquiry Commission.

   At the meeting with Kaufman, Geithner argued that the issue of limiting bank size (Kaufman and Brown were working on a simple bill to cap bank size) was too complex for Congress and that people who know the markets should handle these decisions, Kaufman says. According to Kaufman, Geithner said he preferred that bank supervisors from around the world, meeting in Basel, Switzerland, make rules increasing the amount of money banks need to hold in reserve. Passing laws in the U.S. would undercut his efforts in Basel, Geithner said, according to Kaufman.

Not only have the banks and the regulators lied, they continue to lie. From Yves Smith at naked capitalism:

I get really offended by the bogus accounting, such as the “banks paid back the TARP” or “the Fed lost no money on its lending facilities,” which this story annoyingly has to repeat out of adherence to journalistic convention. This is all three card Monte. So what if the banks paid back loans when the central bank has goosed asset prices vis super low interest rates? That’s a massive tax on savers. And we have the hidden subsidy of underpriced bank rescue insurance. Ed Kane estimates that’s worth $300 billion a year for US banks; Andrew Haldane of the Bank of England has pencilled the annual cost as exceeding the market cap of big banks (and that was in 2010, when their stock prices were higher than now).

The Fed is most assuredly going to have losses. It hoovered up a ton of Treasuries and MBS to shore up asset prices at time when interest rates were already low. The central bank intends to sell them when interest rates rise, to soak up liquidity. Buying when interest rates are low and selling when rates are high guarantees losses. As an old Wall Street saying goes, it’s easy to manipulate markets, but hard to make money from it.

This would not have happened if Glass-Steagall had still been in place. If these details had been known, they would have gone a long way into reinstitution of that law which, for most of the last century, separated customer deposits from the riskier practices of investment banking.

It is long past time that both Ben Bernanke and Timothy Geithner resign. If they don’t do so voluntarily, President Obama should demand they do. I won’t hold my breath.

BTW, so far this morning, not a peep from the traditional MSM about this revelation.

After Bank of America was downgraded by the ratings agencies and over the objections of the FDIC but with Federal Reserve Chairman Ben Bernanke’s blessing, the Bank of America transferred millions of dollars of its worst derivatives to its Merill Lynch unit where they would be insured:

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC- insured bank accounts from risks generated by investment-banking operations. Bank of America, which got a $45 billion bailout during the financial crisis, had $1.04 trillion in deposits as of midyear, ranking it second among U.S. firms.

“The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.”

So why is the FDIC concerned and the Federal Reserve giving its blessing? masaccio at FDL explains:

Of course, the Fed loves it. Bank holding companies can do no wrong as far as the Fed is concerned. The risk to taxpayers, and the moral hazard issues are utterly irrelevant to Ben Bernanke and his buddies. Of course, given the vast conflicts of interest at the Fed, this isn’t a surprise.

There are reasons to be worried about this. First, BAC moved the derivatives at the request of counterparties. The counterparties have a right under their derivative contracts to demand collateral from BAC, as they did after the company’s rating was reduced earlier this year. BAC estimates that would require an additional $3.3 billion in collateral. The downgrade was due to judgment by the ratings agencies that the government was less likely to bail out BAC if it got into trouble. Thus, the effect of the downgrade was to increase the direct risk to the FDIC, by forcing it in effect to guarantee the derivatives of Merrill Lynch. Nice opinion, ratings agencies. I wonder who paid them for it?

Second, if the FDIC has to liquidate BAC, it will have to borrow from the Treasury to pay depositors, and it will have to bill the largest banks for additional fees to pay off the Treasury loans to the extent of actual losses. We have no idea of the interlocking relations of these giants, so we have no idea whether the collapse of one would wreck others. Media reports say there are concerns about the relationships between European banks and US banks, so there is reason for concern about the relations among US giants. If one collapse could lead to others, where is the money coming from to repay the Treasury? []

Third, 82% of derivatives in notional amount are interest rate swaps. Interest rates are at historic lows. What happens when they go back up to normal levels? []

Fourth, BAC has a huge position in credit default swaps, with a notional value of $4.1 trillion. . . . . as we saw with AIG, when CDSs go sour, the counterparty has the right to demand collateral right up to the moment the entity fails. In this case, that collateral would be cash, and it would directly reduce the amount of cash in the Bank. That would be a disaster for the FDIC, which would have to pay off the depositor losses up to the insured limit.

As Yves Smith explains this has an air of criminal incompetence with the tax payers having to foot the bill in the end:

This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.

It is well past time to do something about regulation and oversight of the Federal Reserve.

Preferably some independent adult supervision

What was revealed in the audit was startling: $16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.

Angry? Check out page 131 of the GAO Audit to see the actual amounts that each institution received.

Senator Bernie Sanders released his report on Friday and appeared with Dylan Ratigan to discuss the problems and conflicts within the Fed.

October 19, 2011

WASHINGTON, Oct. 19 – A new audit of the Federal Reserve released today detailed widespread conflicts of interest involving directors of its regional banks.

“The most powerful entity in the United States is riddled with conflicts of interest,” Sen. Bernie Sanders (I-Vt.) said after reviewing the Government Accountability Office report. The study required by a Sanders Amendment to last year’s Wall Street reform law examined Fed practices never before subjected to such independent, expert scrutiny.

The GAO detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves.  “Clearly it is unacceptable for so few people to wield so much unchecked power,” Sanders said. “Not only do they run the banks, they run the institutions that regulate the banks.”

Sanders said he will work with leading economists to develop legislation to restructure the Fed and bar the banking industry from picking Fed directors. “This is exactly the kind of outrageous behavior by the big banks and Wall Street that is infuriating so many Americans,” Sanders said.

The corporate affiliations of Fed directors from such banking and industry giants as General Electric, JP Morgan Chase, and Lehman Brothers pose “reputational risks” to the Federal Reserve System, the report said. Giving the banking industry the power to both elect and serve as Fed directors creates “an appearance of a conflict of interest,” the report added.

The 108-page report found that at least 18 specific current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.

In the dry and understated language of auditors, the report noted that there are no restrictions in Fed rules on directors communicating concerns about their respective banks to the staff of the Federal Reserve. It also said many directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve.  The rules, which the Fed has kept secret, let directors tied to banks participate in decisions involving how much interest to charge financial institutions and how much credit to provide healthy banks and institutions in “hazardous” condition. Even when situations arise that run afoul of Fed’s conflict rules and waivers are granted, the GAO said the waivers are kept hidden from the public.

The report by the non-partisan research arm of Congress did not name but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest, including:

   

Stephen Friedman In 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap Fed loans. During the same period, Friedman, chairman of the New York Fed, sat on the Goldman Sachs board of directors and owned Goldman stock, something the Fed’s rules prohibited. He received a waiver in late 2008 that was not made public. After Friedman received the waiver, he continued to purchase stock in Goldman from November 2008 through January of 2009 unbeknownst to the Fed, according to the GAO.

   

Jeffrey Immelt The Federal Reserve Bank of New York consulted with General Electric on the creation of the Commercial Paper Funding Facility. The Fed later provided $16 billion in financing for GE under the emergency lending program while Immelt, GE’s CEO, served as a director on the board of the Federal Reserve Bank of New York.

   

Jamie Dimon The CEO of JP Morgan Chase served on the board of the Federal Reserve Bank of New York at the same time that his bank received emergency loans from the Fed and was used by the Fed as a clearing bank for the Fed’s emergency lending programs. In 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquire Bear Stearns.At the time, Dimon persuaded the Fed to provide JP Morgan Chase with an 18-month exemption from risk-based leverage and capital requirements. He also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank.

Lets not forget who President Obama chose to replace Rahm Emanuel, Bill Daley, son of legendary Chicago Mayor Richard J. Daley (D) and brother of the more recent Mayor Richard M. Daley (D). Oh, I forgot, Geithner is also the architect of Bill Clinton’s NAFTA Agreement that Obama promised to fix and Midwest Chairman of JPMorgan Chase.

Then there is our Treasury Secretary, Tim Geithner, a protégé of Lawrence Summers and Robert Rubin, who while president of the Federal Reserve Bank of New York, played a large role in directing the Federal Government’s spending on the late-2000s financial crisis, including allocation of $350 billion of funds from the Troubled Asset Relief Program enacted during the previous administration.

None of these people should be allowed anywhere near either the Federal Reserve or the Treasury. Most of them should be in jail.

Federal Reserve chairman Ben Bernanke held a first ever news conference after the central bank’s meeting of Federal Open Market Committee which determines interest rates. His statement and the Q&A after were really boring as Bernanke droned in a monotone voice and filibustered questions. It took a bit, as David Dayen noted, to get to the meat, jobs, and what is the Fed doing to create them.

Bernanke answered that, while he has been engaged in extraordinary efforts to aid the economy, he had to be concerned about inflation as well. So basically, the Fed is failing at one of their mandates (maximizing employment) because they’re worried about their other mandate (price stability)… which they are ALSO FAILING AT! There’s also no awareness that, if inflation rises unacceptably, you can deal with it at that time. Refusing to stop the human suffering of mass unemployment because of the possibility of an inflation rise that can be dealt with if it happens is just a giveaway that the inflation mandate matters overwhelmingly more than the employment mandate.

Jobs? Never mind, too busy trying to control the inflation that hasn’t happened? Do these people shop or drive?

The first quarter growth rate report wasn’t encouraging either, coming in at a dismal 1.8% which was not unexpected due to “Higher commodity prices and winter blizzards that shuttered businesses and delayed construction were among the main causes of the slowdown, along with a large decrease in federal government spending and a sharp increase in imports, which are subtracted from output.” This will effect jobs no matter how optimist Bernanke is about the slow down being “transient”

(G)iven the ground lost during the Great Recession, the economy has a long way to go before its job market and output are back on track. And there are fears that the slow growth in the first quarter may weigh on job growth going forward, since employment trends tend to lag what happens in the rest of the economy.

“We may see employment growth weaken a little bit in the coming months, with more modest increases,” said Paul Dales, a senior United States economist for Capital Economics.

Dayen also reminds us that:

The first quarter saw a pretty modest decrease in spending – $10 billion from two continuing resolutions while negotiations on 2011 appropriations continued. If that was enough of a factor to contribute to sending growth down, then the impact will be the same in the next two quarters. And the fourth quarter, on the 2012 budget, is grand bargain time. So there’s no quarter that won’t be affected by contractionary fiscal policy. And don’t forget the debt limit, a failure to increase with will play havoc with the financial system and economic growth as well.

snip

Growth out of a recession is supposed to be sky-high. This homemade chart from Steve Benen is nice, but he knows that growth has sagged well below where a recovery should be for five straight quarters now. He even says it: “We can and must do much better than 1.8%, but we won’t if the nation pursues a conservative approach that focuses on one problem that doesn’t exist (inflation) rather than the problem that does exist (weak economic growth).”

How does this affect jobs? Job growth was actually above expectations for the quarter given this growth number. But realistically, you cannot expect to lower the unemployment rate without growth of 3% or higher. And as Paul Krugman noted yesterday, if you look at the employment-population ratio or other datum, you’ll see that job growth is totally stagnant. Which is in line with the stagnant growth in GDP.

Also a note about the Budget Battle in Congress, Senate Majority Leader Harry Reid (D-NV) decided to take the bull by the horns and ride the wave of protests at townhall meetings over Wisconsin Republican Rep Paul Ryan’s disastrous budget that passed the House on a strict partisan vote. Reid announced that he will bring the budget up for a vote in the Senate:

“Republicans seem to be in love with the Ryan budget. And they are going to have an opportunity here in the Senate to vote on the Ryan budget and see (how many) Republican senators like the Ryan budget as much as their House colleagues did, he said.

Reid spokesman Jon Summers said that the timing of the vote has not yet been determined.

The idea behind Reid’s plan is to force Senate Republicans to vote on the measure, which could put incumbents facing tough reelections on the spot.

The Ryan budget is not expected to pass the Senate, which is controlled by the Democrats.

“I would hope they do”, Reid said when asked if he thinks the Senate will reject the plan. “It would be one of the worst things to happen to this country if that came into effect.”

Talk of a Republican split emerged alst week when centrist Sen. Susan Collins (R-ME) said she would not vote for Ryan’s plan.

The Supreme Court let stand a ruling from the lower court that forces the Federal Reserve to disclose details about its emergency lending programs to banks during the financial crisis in 2008.

Fed’s Court-Ordered Disclosure Shows Americans’ ‘Right to Know’

A Supreme Court order that forces unprecedented disclosures from the Federal Reserve ended a two- year legal battle that helped shape the public’s perceptions of the U.S. central bank.

The high court yesterday let stand a lower-court ruling compelling the Fed to reveal the names of banks that borrowed money at the so-called discount window during the credit crisis. The records were requested by Bloomberg LP, the parent company of Bloomberg News. In July, Congress passed the Dodd-Frank law, which mandated the release of other Fed bailout details.

Fed Chairman Ben S. Bernanke “now must finally understand that this money doesn’t belong to the Federal Reserve, it belongs to the American people and the American people have a right to know how their taxpayer dollars are being put at risk,” said Senator Bernard Sanders, a Vermont Independent who wrote Fed transparency provisions in Dodd-Frank.

The financial crisis, which began in August 2007 and peaked after the bankruptcy of Lehman Brothers Holdings Inc. in September 2008, focused the public’s attention on the Fed and its $3.5 trillion effort to rescue the banking system, said U.S. Representative Ron Paul, who heads the House subcommittee that oversees the central bank.

“People wanted to know more about what the Fed was doing,” said Paul, a Texas Republican. “It’s been a significant change and the American people won’t ever be complacent about this.”

Fed Will Release Bank Loan Data as Top Court Rejects Appeal

The Clearing House Association contended that Bloomberg is seeking an unprecedented disclosure that might dissuade banks from accepting emergency loans in the future.

Obama Administration

“We are disappointed that the court has declined our petitions, which deal with the protection of highly confidential bank information provided to the Federal Reserve,” the group said in a statement after the high court acted.

A federal trial judge ruled in 2009 that the Fed had to disclose the records in the Bloomberg case, and a New York-based appeals court upheld that ruling.

The Clearing House Association’s chances at getting a Supreme Court hearing suffered a setback when the Obama administration urged the justices not to hear the appeal. The government said the underlying issues had limited practical significance because Congress last year laid out new rules for disclosing Fed loans in the Dodd-Frank law.

“Congress has resolved the question of whether and when the type of information at issue in this case must be disclosed” in the future, the administration said in a brief filed by acting Solicitor General Neal Katyal, President Barack Obama’s top Supreme Court lawyer.

While this is great news, unfortunately, it is a one time disclosure under the terms of the Dodd-Frank bill (pdf) and with the Republicans in control of the House it is unlikely that any amendment for future audits would pass. Obama should have worked harder for better oversight of our tax dollars.

Nation Realizes Money Just A Symbolic, Mutually Shared Illusion

WASHINGTON-The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.

What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world’s largest economy.

“Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we…if we…” said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. “You know what? It doesn’t matter. None of this-this so-called ‘money’-really matters at all.”

“It’s just an illusion,” a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. “Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless.”