Monday, December 12, 2011

Brother, can you spare $7.7 trillion?

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You think the widely publicized $700 million bailout for the Troubled Asset Relief Program (TARP) was a big deal? Hah. It turns out the U.S. Federal Reserve secretly gave banks a payday loan. Payday for the banks.

The Fed dealt out, apparently, a total of $7.7 trillion.

Such generosity enabled the banks to earn $13 billion. Not just U.S. banks. You, taxpayer, helped save "too big to fail" banks such as Royal Bank of Scotland (you gave them the dosh on which they made $1.2 billion), Barclay's ($641 million), and Credit Suisse (a paltry $284 million). Thanks, suckers.

Congress didn't know about it. Even a Federal Reserve governor didn't know the full extent of it.

Bloomberg reports:
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates ... .
Did someone say it's time to shut down the Fed? Well, if not, I just did. A central bank may be a good idea in theory, but it has become one more unelected institution with power over us, like  federal and state bureaucracies. It's an oligarchy of crony capitalists responsible only to each other. It didn't prevent the 1930s depression, and it didn't prevent the second depression that we're enjoying now. 

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3 comments:

Van Wijk said...

Are you considering a protest vote for Ron Paul, Rick?

Rick Darby said...

Van Wijk,

I don't know yet. If only the economy were at issue, he'd be the man. But a president has to deal with domestic problems that don't fall neatly into the economic sphere, plus many choices have to be made in international relations.

I haven't had time to follow all the news, claims, counterclaims, attacks, and defenses concerning Ron Paul. I'll have to make time for all that if he does run as a third party candidate.

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