“Nothing like this has ever been done before by the Federal Reserve,” says Bud Conrad. From holding mostly US treasury notes and gold, the Fed’s balance sheet has been expanded by a whole range of questionable assets and liabilities. In time, Bud says the consequences for the US dollar will be grim.

The Fed may have already begun its role as Wall Street ’supercop.’

The Wall Street Journal reports that the Fed has sent agents into major Wall Street investment banks to makes sure of the banks’ financial wellbeing.

“We want to be sure that any lending we do to the investment banks will be done on an appropriately sound basis,” said Fed chief Ben Bernanke.

The Fed has is lending money to investment banks, even though it currently has no statutory regulatory power over them.