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PRESS RELEASE
As LaRouche Said in 2009,
the Federal Reserve Is Bankrupt
Feb. 28, 2013 (EIRNS)The New York-based risk analysis company MSCI has just completed a stress test on the U.S. Federal Reserve System, which found that, under the "adverse" scenario of a Fed "exit" from Quantitative Easing, the mark-to-market [fair value accounting] loss on the Fed's asset book (currently valued at some $3 trillion), would be $547 billion over three years. The amount of such a loss is many times the value of the Fed's capital, and the MSCI finding means that the Fed is in fact bankrupt, by any honest accounting measure.
MSCI is the same company which the Fed itself uses to perform stress tests on the 19 largest U.S. banks. The current study, commissioned by Bloomberg News, applied the same criteria it uses on the banks, to study the Fed's own solvency. "The potential losses are unprecedented in the Fed's 100-year history," Bloomberg wrote in a Feb. 26 wire.
The report of the Fed's bankruptcy should come as no surprise to anyone who has followed Lyndon LaRouche's analysis over the years. For example, during the question-and-answer period of an Aug. 1, 2009 webcast, LaRouche stated:
"First of all, I think we're going to have to recognize that the Federal Reserve System is, by any appropriate approach, bankrupt....
"It covers up for its bankruptcy by printing money. This reminds me of Germany in 1923....
"What we do is, we simply get rid of it by bankruptcy.... Then what we're going to have to do is, we're going to have to develop the Third National Bank of the United States."
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