Is this the reason why the Fed requires secrecy?
So now we know that Greenspan and Bernanke are not idiots. The Fed knew about the housing bubble as early as March 2004 and deliberately hid it from citizens. Never mind all the BS that came from Greenspan and Bernanke. The organization is crooked and needs to be fully exposed. Bring on a full audit.
They may not be idiots, but they are not trustworthy either. Morality and ethical behavior like this should not disqualify individuals from any public or quasi-public position. To think that they were in charge of the US monetary system, with absolutely no oversight, is outrageous.
Their behavior is more affirmation of Albert J. Nock’s pessimistic, if not hateful, opinion of government:
Taking the State wherever found, striking into its history at any point, one sees no way to differentiate the activities of its founders, administrators and beneficiaries from those of a professional-criminal class
An impetus for more control of the Fed is likely to be spurred by such revelations. While that might be helpful, it does not solve the interventionist central planning that the agency engages in. There is an argument for keeping Congress out because their proclivities could indeed make things worse. There is even a stronger argument for abolishing the Fed, but that will not happen because it would be the equivalent of obliterating a strong national government.
Karl Denninger expresses his rage while laying out the details and implications of the coverup:
Let’s face the now-documented facts:
The Fed knew about the housing bubble, and both Alan Greenspan and BEN BERNANKE intentionally suppressed any public discussion of same by The Fed.
This isn’t conjecture any longer, and we can no longer believe that there was any sort of mistake involved here, nor a difference of opinion.
As disclosed from the Fed Minutes (the real ones, transcripts, not the abbreviated cheat sheets) and as now written about on Huffington Post, we have a problem here with credibility – and intentional misdirection:
“We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand,” Greenspan said, according to the transcripts of a March 2004 meeting.
You mean an argument that you felt was vital to your continued asset-appreciation bubble Alan? One that could only be maintained by intentionally misleading the public by suppressing dissent within The Fed, lest it leak out into the public discourse and people form their own opinions?
At the same meeting, a Federal Reserve bank president from Atlanta, Jack Guynn, warned that “a number of folks are expressing growing concern about potential overbuilding and worrisome speculation in the real estate markets, especially in Florida. Entire condo projects and upscale residential lots are being pre-sold before any construction, with buyers freely admitting that they have no intention of occupying the units or building on the land but rather are counting on ‘flipping’ the properties–selling them quickly at higher prices.”
Ah, that wasn’t part of the minutes or public discussion, was it? Oh no. We couldn’t have that.
“Reports from some contacts suggested that speculative forces might be boosting housing demand in some parts of the country, with concomitant effects on prices, suggesting the possibility that house prices might be moving into the high end of the range that could be consistent with fundamentals,” reads the minutes, which were released to the public several weeks after the meeting.
That was a lie. Read the above. Buyers freely admitting they had no intention of occupying the units and were only flipping them – wasn’t speculation and it wasn’t a “might.” It was a fact.
In point of fact I can speak to this personally, as a former close associate of mine who is in the Real Estate business tried to get me involved in flipping pre-sale condos. I declined, recognizing after a bit of analysis that this was a huge game of musical chairs in which someone would wind up without a seat, and (correctly) perceiving that it might be me.
Had these transcripts been released contemporary with the events, we might have avoided the worst parts of the housing bubble.
Had they been released before Bernanke’s confirmation, he would have had to answer for what is clear intentional misdirection and misleading of The American Public.
What was the reason to not audit The Fed and force them to act in the sunlight again?
Is it so they can screw the American Public out of another $3+ trillion in wealth and cause another 8 million Americans to lose their jobs?
I think so.
Next (uncomfortable) question: You’ve read the recent Fed Statements and “minutes”, right? Have you bought stocks, or stayed in the market, in whole or in part as a consequence of what you read? Now ask yourself: were you lied to again this time around?