Bank "secrecy" tells the observant what they need to know.

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6 March A.D. 2009

Bank "secrecy" tells the observant what they need to know.

For introductory perspective, here's a question: May the "created" tell the "creator" what to disclose or when?

Here's the translation: "Secrecy" is the cover story for "immunity" as in "sovereign immunity." 

I'm not saying that the central bank has it. I'm saying that the people behind the central banking system think they have it.  Whether they have it or not isn't quite so much the issue as what is the next form of hell they intend to try to drag their addicted-to-funny-money nations through to get them to stop demanding disclosure. Always remember that this very same banking system and mentality is responsible for every single war this nation has been dragged into. For example, when "we" didn't renew the charter in 1811, we experienced the war of 1812. Lo and behold, what happens next but the Second Bank of the United States.

I highly recommend reading fully "The Coming Battle" originally published in 1899.
http://www.apfn.org/apfn/comingbattle.htm
http://www.newswithviews.com/TheComingBattle/TheComingBattleIndex.htm

There's a silver lining. The "income tax" system is a necessary part of the "funny money" scam. When it comes to "money supply," given the type of faucet into the tub, there must also be a drain back out of the tub.  The "income tax" scam is a drain back out of the tub. (In this "funny money" based system, all "taxes" serve this purpose.)  One problem "they" face, then, with this "secrecy" theory arises with the "income tax" scam.  Since "taxpayer" means "fiduciary" and since a trust formed for an illegal purpose is void ab initio, if "they" aren't going to tell "us" where the "money" is going, or has already gone, then they run head on into The Patriot Act. That which is not disclosed is presumed to finance "terrorism".

Putting these pieces together, since "they" cannot or will not prove that they are NOT financing "terrorists" then, under The Patriot Act, they are presumed to be financing "terrorists" which means, as a result, that there are no "taxpayers" - period, because all those alleged trust agreements were formed, however clandestinely, insidiously, and without actual knowledge of the alleged fiduciary, as a mechanism for tricking the alleged "taxpayer" into financing "terrorism". (Think about it!)

Harmon L. Taylor
Legal Reality
Dallas, Texas

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------- Original Message --------

Subject: RE: Fed Refuses to Release Bank Data, Insists on Secrecy (Update3)
Date: Thu, 5 Mar 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=aG0_2ZIA96TI&refer=home

Fed Refuses to Release Bank Data, Insists on Secrecy (Update3)

By Mark Pittman and Craig Torres

March 5 (Bloomberg) -- The Federal Reserve Board of Governors receives daily reports on bailout loans to financial institutions and won’t make the information public, the central bank said in a reply to a Bloomberg News lawsuit.

The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast “a stigma” on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral.

Fed secrecy was the focus of a Senate Banking Committee hearing today in which the panel’s top two members said the central bank’s reluctance to identify companies benefiting from the American International Group Inc. bailout risks undermining public confidence in the government.

“If the American taxpayer’s money is at stake, and it is, big time, I believe the American taxpayers, the people, and this committee, we need to know who benefited, where this money went,” said Senator Richard Shelby of Alabama, the committee’s top Republican. “There is no transparency here. We are going to find out.”

The bank provides “select members and staff of the Board of Governors with daily and weekly reports” on Primary Dealer Credit Facility borrowing, said Susan E. McLaughlin, a senior vice president in the markets group of the Federal Reserve Bank of New York in a sworn statement. The documents “include the names of the primary dealers that have borrowed from the PDCF, individual loan amounts, composition of securities pledged and rates for specific loans.”

Information Shared

The Board of Governors contends that it’s separate from its member banks, including the Federal Reserve Bank of New York which runs the lending programs. Most documents relevant to the Bloomberg suit are at the Federal Reserve Bank of New York, which isn’t subject to FOIA law, according to the Fed. The Board of Governors has 231 pages of documents, which it is denying access to under an exemption under trade secrets.

“I would assume that information would be shared by the Fed and the New York Fed,” said U.S. Representative Scott Garrett, a New Jersey Republican. “At some point, the demand for transparency is paramount to any demand that they have for secrecy.”

Bloomberg sued Nov. 7 under the U.S. Freedom of Information Act, requesting details about the terms of 11 Fed lending programs.

The Bloomberg lawsuit said 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.”

‘Deeply Troubled’

Fed Vice Chairman Donald Kohn told the Senate panel today that revealing the names of AIG’s counterparties would make companies less likely to do business with any recipient of government aid, risking further turmoil at the insurer and financial markets.

“I don’t consider that an adequate” response, “to put it mildly,” Committee Chairman Christopher Dodd, a Connecticut Democrat, told Kohn at the hearing. “The public is deeply, deeply troubled.”

Shelby told the Fed vice chairman that “your answer here is very disturbing.”

“People want to know what you’ve done with this money,” he said.

Kohn said the Fed wouldn’t reveal the counterparties in Maiden Lane III, a company formed by the central bank to purchase collateralized debt obligations on which AIG’s financial products unit had written credit-default swaps.

“The Fed and the Treasury can be secretive for a while, but not forever,” Shelby said.

Commercial, Consumer Loans

The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank’s loans don’t have the oversight safeguards that Congress imposed upon the TARP.

Total Fed lending exceeded $2 trillion for the first time Nov. 6 after rising by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA. Fed lending as of Feb. 25 was $1.92 billion.

On Feb. 23, the Fed disclosed a breakdown by broad categories for $1.81 trillion of collateral pledged by banks and bond dealers as of Dec. 17 after Congress demanded more transparency from the central bank.

$11.7 Trillion

The largest portions of collateral being held by the Fed at that time were $456 billion in commercial loans, $203 billion in consumer loans and $159 billion in residential mortgages, according to the central bank’s Web site. It didn’t identify any loans or provide their credit ratings and said it will update the figures about every two months.

Government loans, spending or guarantees to rescue the country’s financial system total more than $11.7 trillion since the international credit crisis began in August 2007, according to data compiled by Bloomberg. In return, banks left collateral with the central bank that effectively acts as a credit line that lenders can draw on without posting additional assets.

Bloomberg News, a unit of New York-based Bloomberg LP, on May 21 asked the Fed to provide data on collateral posted from April 4 to May 20. The central bank said June 19 that it needed until July 3 to search documents and determine whether it would make them public. Bloomberg didn’t receive a formal response that would let it file an appeal within the legal time limit.

‘Unprecedented Crisis’

On Oct. 25, Bloomberg filed another request, expanding the range of when the collateral was posted. It sued Nov. 7.

In response to Bloomberg’s request, the Fed 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.”

Fed Chairman Ben S. Bernanke and then Treasury Secretary Henry Paulson said in September they would meet congressional demands for transparency in a $700 billion bailout of the banking system.

Banks oppose any release of information because that might signal weakness and spur short-selling or a run by depositors, the Fed argued in its response.

“Rumors that Citibank might be borrow at the DW (discount window) in the early 1990s reportedly sparked runs of some of its offices in Asia,” said Brian Madigan, the Fed’s director of the Division of Monetary Affairs, in a sworn statement.

The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg lawsuit, filed in New York, doesn’t seek money damages.

“You could make everything a trade secret,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press.

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Mark Pittman in New York at mpittman@bloomberg.net
Craig Torres in Washington at ctorres3@bloomberg.net.

Last Updated: March 5, 2009 15:52 EST


NOTICE: Harmon L. Taylor, Legal Reality, Bloomberg are not affiliated with Freedom School.
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