Why has the New York Fed run up such a monster balance sheet? It’s because the New York Fed is privately-owned by some of the largest, most dangerous banks in America which, since 2008, have been habitually propped up by cheap money from the New York Fed. Those mega banks include JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley. If the New York Fed is privately owned by the member banks in its region (as are all of the 12 regional Fed banks) and has run up a $3.9 trillion balance sheet, its share owners should be on the hook for its liabilities, correct?
This is where another of those rarely discussed structural wealth transfer mechanisms for the one percent comes in. If the Fed and its rapidly growing $6.98 trillion balance sheet blows up, the U.S. taxpayer will be on the hook for 98 percent of the losses…