This single class of mystery money isn’t a lot less than the entire US yearly GNP, commonly cited as being about $14 trillion.
By Roger Baker / The Rag Blog / May 15, 2009
In this video, we have the top Federal Reserve Inspector General, the federal watchdog responsible for big bank oversight. She is admitting under oath before Congress that she has no idea of just what to think about a mysterious $9 trillion worth of off-balance-sheet bank transactions. This is a figure cited by a Bloomberg article, and information that one would imagine a person in her position would soon know about. This single class of mystery money isn’t a lot less than the entire US yearly GNP, commonly cited as being about $14 trillion.
That being the case, her testimony describes federal oversight over some of the most important issues that any official could ever deal with, since it could put every US citizen on the hook for something close to $30,000 per person. But we have no idea of what these federally sanctioned taxpayer guarantees are actually propping up.
Given the current bottomless pit credit situation, the biggest investment banks probably don’t want anyone examining their total debt risk too closely. Meaning they are never going to permit the Federal inspectors they hire to operate very independently, without prior orders to audit or inspect.
Are the investment banks better termed ‘robber banks’, gorging themselves on public bailout guarantees because they’re too big to fail? If so, what happens when Obama finds out?