"How did the Federal Reserve System inject that much fiat money into the banking system and not leave a trace in its books?"
This should be the biggest single economic question on earth today. I can think of nothing more relevant. It should be the question for graduate-level courses in accounting, in money and banking, and in finance. It should be the #1 question asked by Congress of a subpoenaed Ben Bernanke and equally subpoenaed Federal Reserve accountants. Why issue subpoenas? Because whenever he is not under oath, which is always, Bernanke has three words in reserve that always stop Congress dead in its tracks: "I don't know." This works every time!
There is a great video by a pair of Good Old Boys who make very effective use of a video clip of Bernanke uttering his Congress-paralyzing line. If you have not seen this video, you have a real treat in store.
The mainstream media's response to the procedures used to make these off-the-books loans has been clear: "There is nothing to see here. Move along."
By the way, those words from the first "Star Wars" movie – "move along" – were uttered memorably by Sir Alec Guinness to the mentally bamboozled Empire stormtrooper. The phrase has become part of the American language. This development is altogether positive. The words are right up there with "I am shocked. Shocked!" from "Casablanca." When any writer uses that "Star Wars" phrase, we know that he knows that there is plenty to be suspicious of, but the authorities are playing pretend. The phrase is used a lot these days, but not nearly enough.
Side note. Guinness did not say, "There is nothing to see here. Move along." He said the far more relevant: "He can go about his business. Move along." The trooper replied: "You can go about your business. Move along."
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