The claim has been made repeatedly here and elsewhere–a claim derided as conspiracy theory by the mainstream–that the US Federal Reserve has one purpose: to protect the game of the big banks. Everything else they say and do is cover for that single goal.

Thankfully, a Fed insider has offered excellent confirmation, including apologies to taxpayers for his actions. Everyone with the slightest interest in how the world actually works should read the full article by this fellow.

As background: Talk about an insider, this guy was in charge of the program through which the Fed purchased $1.2 trillion of mortgage backed securities (MBS) from the banks in 2009-2010. The Fed conjured up new electronic currency to pay for this. They call that Quantitative Easing (QE) instead of money printing because such lying does succeed in fooling most of the people most of the time.

In 2009, these MBS “assets” were called toxic assets by anyone with a fondness for truth because they were large packages of mortgages backed by sub-prime and other mortgage loans that were not being re-paid, and by residential real estate collateral that was plummeting in value. In other words, the big banks peddling and holding these assets were insolvent, bankrupt, in part because of the plunging value of their MBS. So, the Fed came to the rescue, of course, buying up toxic MBS from the big banks and paying many times the pennies-on-the-dollar actual street prices of these securities (Don’t you just love the BS terminology that pervades the financial sector?) to make the banks appear less bankrupt.

Here are some choice quotes from Andrew Huszar, a true Wall St and Federal Reserve insider:

We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.

I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time…

My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed’s trading floor? The job: managing what was at the heart of QE’s bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.

This was a dream job, but I hesitated. And it wasn’t just nervousness about taking on such responsibility. I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street…

In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.

It wasn’t long before my old doubts resurfaced. Despite the Fed’s rhetoric, my program wasn’t helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn’t getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.

From the trenches, several other Fed managers also began voicing the concern that QE wasn’t working as planned. Our warnings fell on deaf ears. In the past, Fed leaders—even if they ultimately erred—would have worried obsessively about the costs versus the benefits of any major initiative. Now the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street’s leading bankers and hedge-fund managers. Sorry, U.S. taxpayer.

Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street. The banks hadn’t just benefited from the lower cost of making loans. They’d also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed’s QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.

You’d think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2…

Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history…

And the impact? Even by the Fed’s sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. By contrast, experts outside the Fed, such as Mohammed El Erian at the Pimco investment firm, suggest that the Fed may have created and spent over $4 trillion for a total return of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S. economic output). Both of those estimates indicate that QE isn’t really working.

Unless you’re Wall Street. Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets…

So the big-bank rich got very much richer. What a surprise. A perfect strategy, still in full implementation in plain site, by a Fed fulfilling its real goal. The full article is here.

The quotes above might as well be directly from those derided for years as Fed conspiracy theorists. The latest survey I saw said that 74% of US citizens favor a full audit of the Fed, which is a private bank masquerading as a quasi-government agency, owned by the big banking families of the world, and which has the concession from the US Congress to print money. (Nice concession, eh?) But those 74% will likely be ignored. 90% of US citizens were against the TARP bank bailout in 2009, but it became law anyway. The people’s wishes are meaningless when it comes to the criminal partnership between Wall St and Washington DC.

Huszar didn’t name names or produce documents, so unlike other US whistleblowers, he likely won’t be jailed or hauled into endless court proceedings. But maybe this will encourage others to speak up about the Fed, perhaps even to reveal the truly nefarious aspects of this organization and its owners. And maybe someday the politicians who take millions from Wall St will become whistleblowers and tell us what marching orders they are given when they pocket those funds. Hey, a person can imagine! There’s no law against that….Is there?