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The Federal Reserve apparently can't account for $9 trillion in off-balance sheet transactions.
When Rep. Alan Grayson (D-Orlando) asked Inspector General Elizabeth Coleman of the Federal Reserve some very basic questions about where the trillions of dollars that have come from the Fed's expanded balance sheet, the IG didn't know.
Worse, nobody at the Fed seems to have any idea what the losses on its $2 trillion portfolio really are.
"I am shocked to find out that nobody at the Federal Reserve is keeping track of anything," Grayson says.
I think you are being a tad bit harsh on the FED here
I mean come on, it's easy to lose 9trillion dollars
off-balance sheet transactions finance definition
Financial deals and arrangements that can have a material affect on a company but are structured in such a way that they do not show up on a company’s balance sheet and do not affect a company’s borrowing capacity.
Off-balance sheet activities took on huge importance in 2001 when the off-balance sheet deals that Enron Corp. had engaged in came to light.
Because the details about off-balance sheet activities are unknown to investors, the off-balance sheet transactions can hide a significant amount of liability.
It's not surprising to me that this guy (Grayson) is NEW. He hasn't been tainted yet.
Thank you for contacting me to express your concerns with the transparency of the Federal Reserve. I appreciate knowing your thoughts on this important issue.
In 1913, Congress implemented the Federal Reserve Act, which created the Federal Reserve System to serve as the central bank for the United States. The Federal Reserve formulates the nation's monetary policy, supervises and regulates banks, and provides a variety of financial services to depository financial institutions and the federal government. The System comprises three major components, the Board of Governors, a network of 12 Federal Reserve Banks, and member banks.
Congress is currently considering H.R. 1207, the Federal Reserve Transparency Act of 2009, which was introduced by Congressman Ron Paul (TX). If enacted, this bill will reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported to Congress. H.R. 1207 has been referred to the House Financial Services Committee for further consideration.
I appreciate your concerns regarding the Federal Reserve System; however, I respectfully disagree that being an independent agency makes the Federal Reserve in any way less accountable to the American people. Congress created the Federal Reserve as an independent agency to protect it from excessive political and private pressures. At the same time, the Federal Reserve is accountable to Congress by both law and practice. The seven members of the board are appointed by the president with the advice and consent of the U.S. Senate, and Congress routinely monitors the Federal Reserve System through formal and informal oversight activities.
That being said, I understand your concerns with the Federal Reserve. Sound monetary policy is essential to the health of our economy and the wellbeing of the American people, and I will continue monitoring this issue closely. As Congress continues to debate the Federal Reserve Transparency Act of 2009, I will keep your support in mind.
Thank you again for sharing your views on this issue. If I can be further assistance, please contact my Oregon office at 503-326-2901 or 800-422-4003.
With warm regards,
Member of Congress
Originally posted by burlysoft
...meanwhile, my Congressman, David Wu (Oregon), doesn't believe HR 1207 is warranted, stating "I respectfully disagree that being an independent agency makes Federal Reserve in any way less accountable to the American people".
To the wise ATS members tuning in, how would you attempt to change the mind of your congressman if he believed this way?
For those interested here is Congressman David Wu's email in full:
snip full email
Originally posted by ExPostFacto
9 Trillion - $30,000 for every man woman and child in the USA just magically disappeared. Kind of like 2 Trillion went missing just before 9/11 from the pentagon. So what can we expect in the coming months?