Planet Ponzi Author Feierstein Charges the Fed ‘Has Become Nothing More Than a Gigantic, Rogue Hedge Fund’
April 12, 2020 (EIRNS)—In an op-ed published April 10 by RT, investor and banker Mitchell Feierstein ripped into the way the U.S. Federal Reserve under Jerome Powell “has become nothing more than a gigantic, rogue hedge fund that feels it has a lawful mandate to buy any assets not nailed down.” The author of Planet Ponzi, Feierstein had a notable public exchange with U.S. physical economist Lyndon LaRouche during one of the latter’s webcasts in 2015 (see separate slug).
In his RT article, Feierstein noted that recent Fed steps are making things worse at an accelerating rate:
“Powell’s Fed [just announced that it] will buy corporate debt—including the riskiest corporate debt in existence, junk bonds—as part of another, larger $2.3 trillion rescue package for banks, businesses, builders and municipalities. Junk bonds are such garbage that pension funds are prohibited by law from purchasing them. Bailing out foreign banks is not in the Fed’s mandate, nor is buying municipal bonds, but it continues to do so.... The Fed is socializing hedge fund investments gone bad, placing taxpayers at risk.”
Feierstein then describes the revolving door between the Fed and top investment banks: “One of the most significant hedge funds in the world, at least in asset size, Ken Griffin’s Citadel, hired Federal Reserve Chairman Ben Bernanke after he left the Fed.” Feierstein also writes that Neel Kashkari, currently president of the Federal Reserve Bank of Minneapolis, was hired in 2009 “by investment management firm PIMCO, which boasts that it manages nearly $2 trillion in assets for every class of investor, including some central banks.”
Feierstein concludes by explaining that not all debt is created equal.
“Debt is never a bad thing if it is used to create organic growth or fund infrastructure development that creates opportunities and employment. Debt is dangerous when used to develop grotesque weapons of mass financial destruction by structuring synthetic derivative products that use leverage of 300 to 1 or more—meaning that $1 million can control $300 million in assets.”