Two weeks ago, when the Federal Reserve and five other central banks announced that they were working together to provide liquidity to the markets by lowering so-called swap rates, investors ate it up and markets rallied on the news. But for Dick Bove, financial sector analyst at Rochdale Securities, it simply marked the latest lie from an institution he says has repeatedly proven that it cannot and should not be trusted.
"It's very difficult to trust the Federal Reserve because we really don't now what their core policies are," Bove says in the attached video. "My guess is that they're willing to provide a huge amount money to the ECB in order to stabilize the condition of the European banks. Are they gonna tell you that? No, they're not. Are they doing that now? Absolutely."
In fact, to hear Bove's take on the now-disclosed $7.7 trillion that the Fed pumped in to the global financial system from 2007-2009, you'd think he was the latest convert to join the "Abolish the Fed" bandwagon, but he's not.
"Even though what he (Fed Chairman Ben Bernanke) did steps way outside the bands of what a democracy is set up to do, he was right and his doing it helped everybody," Bove asserts. "From a democratic standpoint, from the operation of an open society, what Bernanke did was horrible."
But he admits the result is that Bernanke prevented a depression. "What he did was magnificent," says Bove.Read More »from The Fed and Bankers Cannot Be Trusted: Dick Bove