These transcripts show the Fed knew so much more than it said in 2007 about the ills of the system. Is lying really the best policy?

You can read all the secret files here http://www.federalreserve.gov/monetarypolicy/fomchistorical2007.htm

CBC News-

2007 documents reveal policymakers failed to grasp severity of coming recession

U.S. officials at the Federal Reserve drastically underestimated the world economy’s likelihood to plunge into a financial crisis in 2007, according to newly released transcripts of meetings from that time.

On Friday, the Fed released a series of transcripts of high-level meetings between policymakers through 2007, and the documents paint a picture of an agency that was guarding its language publicly, but expressing serious concern behind closed doors.

“The odds are that the market will stabilize,” Fed chair Ben Bernanke told a meeting of his counterparts in August 2007. In hindsight, GDP growth was already beginning to slow. But the full force of the financial crisis had yet to be felt.

[CBC NEWS]

image: Inside Job Movie

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