Has the Federal Reserve Kept 2 Sets of Books for the Last 50 Years?

GasGasGas
Published on Jul 24, 2021
A new take on the closing of the gold window (at least new to video), and just in time for the 50th anniversary of that fated dayâ€¦

This episode of Mafiacracy Now shows that the Federal Reserve opened itself up to a massive blast of transparency the very minute it started selling cash and reserves not backed by gold (or anything else of value that the Fed can't freely generate) back in 1971.

The video leverages a recent law review article from an international team of prestigious legal scholars (and a lone economist), which makes the highly compelling case that once the gold window closed, cash and reserves alike ceased to qualify as liabilitiesâ€”undercutting every central bank balance sheet in the west.

And since those balance sheets have been absolutely larded with sovereign debt for the last yearâ€”actually, let's make that "alleged debtâ€ since it has no legal validity in the first place, not when the underlying liabilities fail to qualify legally as liabilitiesâ€”the public and private debt burdens are being overstated to the tune of roughly $25 trillion across the western world.

Whoops.

And while that's certainly a problem shared by all western central banks generally, the Federal Reserve in particular faces problems that are far worse than that, as this episodeâ€”applying the teachings set forth by the stunning law review articleâ€”explains.

Indeed if the Fedâ€™s only problem were that its balance sheet overstates liabilities by, oh, $7.3 trillion give or take, it would be easy for the Fed to acknowledge the error of its ways for the last 50 years and reduce U.S. debt figures accordingly.

But alas, that long overdue financial reckoning pales in comparison with the legal nightmare that the Fed now potentially faces, as explained here. Damn. And just as the Fed was planning to launch a central bank digital currency, too...

This is the first of two episodes on this subject. Stay tuned...

References:

Law Review Article: â€œCentral Bank Money: Liability, Asset, or Equity of the Nation?â€, by Michael Kumhof et al.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3730608

â€œThe Merchants of Wall Street: Banking, Commerce and Commodities,â€ by Saule T. Omarovaâ€
https://www.minnesotalawreview.org/wp-content/uploads/2019/07/Omarova_MLR.pdf

Legal Concept of Money, by Simon Gleeson:
https://global.oup.com/academic/product/the-legal-concept-of-money-9780198826392?cc=us&lang=en&

International Financial and Monetary Law, by Rosa Lastra:
https://global.oup.com/academic/product/international-financial-and-monetary-law-9780199671090?cc=us&lang=en&

â€œThe Chicago Plan Revisited,â€ by Jaromir Benes and Michael Kumhof:
https://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

Legal Aspect of Money (4th ed.), by F.A. Mann
https://academic.oup.com/bybil/article-abstract/54/1/259/325021?redirectedFrom=fulltext

Debt by Design, by Josh Maree
https://www.amazon.com/Debt-Design-Joshua-Maree/dp/1365756106