Why do people have this strange idea that somehow the Federal Reserve is some kind of force for good? Louis McFadden knew the truth.

Louis McFadden knew the truth

Ben Bernanke's monetary policy is best described in the picture below.

The Federal Reserve is a wholly privately owned company.
Like all private companies it's sole goal is to maximise the profits of it's large shareholders.
The major shareholders of the Federal Reserve private banks are the big banks.
All of the Federal Reserve actions are directed towards increasing the profits of the large banks.

The Federal Reserve's publicly stated purpose is to provide price stability.
But seeing as in the course of the Federal Reserve's existence the dollar has been devalued by over 96% that can hardly be true.
Also it is very difficult to make money speculating in flat markets - it is much easier if there are large movements in the markets.
The big banks now make most of their money from speculation (not from lending as banks used to do).
To this end the Federal Reserve seeks to engineer and exacerbate large movements and swings in the market (usually over a period of several months or a few years so the trend can easily be caught).

The actions of the Federal Reserve can easily be seen over the last few years.
They pumped lots of cheap money into the market to exacerbate the housing bubble, allowing the big banks to collatoralise and sell on huge amounts of mortgage debt.
They are now directly bailing out the big banks with $480bn a year in QE3 by buying impaired mortgage assets at much more than they are worth from the big banks.
They are also inflating a stock market and bond bubble by pumping a further $540bn a year into a market that is already awash with cash, the banks cannot lend it out - nobody wants to borrow it.
The Federal Reserve is now the largest buyer in the US Treasury market - outweighing the total bought by all other Central Banks. This creates even more almost free money for the big banks to speculate with.

The Federal Reserve know that will lose several trillion dollars from their current actions of buying huge amounts of debt at record high prices. But they are hoping to pass on these huge multi trillion dollar trading losses to the taxpayer in a few years time.
Meanwhile the big banks (the Feds major shareholders) are making hay while the going is good.
http://ian56.blogspot.co.uk/2013/02/there-is-no-way-out-for-federal-reserve.html

People are already starting to ask questions about how the Federal Reserve is going to exit from the huge balance sheet they are building - e.g. this :-
http://www.cnbc.com/id/100569744
I just answered their question. The Federal Reserve is expecting to be bailed out by the taxpayer - there is no way they can avoid multi trillion dollar losses.  

N.B. It has just been announced that Ben Bernanke will not be attending the Central Bank conference in Jackson Hole this year. The first time a Fed chairman has not attended for 25 years.
http://www.telegraph.co.uk/finance/economics/10008938/Bernanke-to-miss-Jackson-Hole.html 
It has also been previously reported that Bernanke will not be seeking another term. Perhaps he is trying to get out before the crash, he knows is coming, happens - just like Alan Greenspan did in 2006.