The Fed Bails Out Gaddafi’s Libyan Bank, Arab Banking Corp. of Bahrain, Banks of Bavaria, Korea and Mexico … But Shafts America

The Federal Reserve Bails Out Fatcat Bankers and Financiers Worldwide … But Shafts the Average American

Fox Business noted in December:

The conflicts of interest and policy controversies in the Federal Reserve’s bailout of the financial system now include helping out millionaires, billionaires, foreign automakers, and companies whose executives sit on the board of directors of the U.S. central bank.

The Federal Reserve also bought more than $2.2 billion in commercial paper from the state-owned central bank of Bavaria, and it gave more than $23 billion in loans to the Arab Banking Corp. based in Bahrain, with an interest rate as low as a quarter of a percentage point. The Federal Reserve also lent more than $9.6 billion to the Central Bank of Mexico.

***

Banks worldwide tapped into the Federal Reserve’s emergency lending programs more than 4,200 times for a total of $3.8 trillion, estimates show.

Senator Sanders’ staff found that “several billionaires and tens of multi-millionaires received cheap loans from the Fed to invest in securities backed by auto, mortgage, credit card, student and mortgage loans,” Sanders’ letter says. That Fed program is called the Term Asset-backed Securities Loan Facility.

The rich include Christy Mack, the wife of Morgan Stanley’s John Mack, billionaire businessman H. Wayne Huizenga; and Michael Dell, co-founder of Dell Computer, hedge fund manager John Paulson and private equity honcho J. Christopher Flowers.

***

[Senator Sanders] also says that it appears the Fed provided loans to over 100 separate hedge funds, offshore funds, and other investment funds located in the Cayman Islands and other tax havens via the TALF program alone.

***

Sanders also wants to know why the Federal Reserve bailed out the Korea Development Bank, the state-owned bank of South Korea, by purchasing more than $2.2 billion of its commercial paper, and why it also extended more than $40 billion to the central bank in South Korea.

I’ve previously noted that the Fed bailed out the Central Bank of Libya under Gaddafi.

Indeed, Ron Paul – the current chair of the monetary policy subcommittee – says that one-third of Fed bailout loans – and essentially 100% of NY Fed loans – went to foreign banks.

The American people didn’t get to vote on these huge bailouts and low-cost loans to foreign banks.

Congress didn’t get to vote on them … they didn’t even know about them.

Independent economists didn’t have a chance to weigh in on whether shipping American dollars abroad is good for the U.S.

Indeed, it seems as if the Fed has chosen to help everyone but the average Americanchoosing the big banks and financiers – abroad or in the U.S. – again and again at the expense of the little guy. (The Fed is even intentionally curbing lending by the banks to Main Street.)

No wonder even the non-partisan Government Accountability Office calls the Fed corrupt and riddled with conflicts of interest.

No wonder high-level economists have said that the Fed caused both the Great Depression and the current economic crisis.

No wonder economists say that the Federal Reserve should be ended – or its powers be dramatically curtailed.

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  • http://thefarcebook.blogspot.com Droid

    This is vital information – the slogan “End the Fed” doesn’t do justice these numbers, to the fact that this is monetary policy being created by a treacherous institution. Billions and billions created out of thin air, obscuring valuations of everything. How can such a rogue system be reigned in?

  • Wooten Berston

    Ending the Fed does nothing to solve the problem. It leaves the structure above the Fed intact and the predation continues unabated. If anything, there would be even less control over the monster of the global central banking cartel.

    What’s needed is the nationalization of the central bank. Transfer the power away from the oligarchs and put it in the hands of Congress. Congress–NOT the Executive Branch, which has proven itself to be utterly corruptible. Think about it. There are at least a few honest men in Congress but apparently none in the Executive Branch.

    Turning power over to the “private sector” is nothing less than insane. It is once again the equivalent of chopping holes in the bottom of the boat “to let the water out”. The “private sector” is the real author of all the problems.. through it’s system of bribery, blackmail, and intimidation, it has hijacked the process of governance to enrich a tiny clique of ruthless oligarchs. The answer, obviously, is not to give the oligarchs even more power!

    Bullshit don’t float. Who depends on a bullshit lifesaver, drowns.

  • http://MaineArtists.US Don Robertson

    The FED is “loaning” this money (as it prints it up) to these foreign banks, trillions upon trillions.

    LoL! “Pisser”, is an apt and suitable East-Coast slang expression. Pisser.

    The repayment of these loans will come as a form of Imperial Tribute made in the one global currency left standing.

    That currency is the dollar.

    The FED is banking on the NEARLY infinitely complex reality of the currency marketplace.

    The FED has the power and the authority to unleash the hammer of this deflationary depression at any time. Deflation (the alternative inflation the likelihood of which we all debated here more than a year ago) still hovers over the world like the Sword of Damocles -despite all this dollar-printing.

    This is a stunning fact that the threat of deflation has never gone away. We are riding the knife’s edge, as it were. But God! Just look at housing.

    Geithner has been in Europe trying to arrange the financing of the European Union -in exactly the same fashion, more Imperial Tribute for the Masters of Money.

    These men are not geniuses. They merely have learned to think in terms few people understand.

    Now, when everyone has their chains tightly-fastened, expect that deflationary depression to destroy China and make it too -a shackle bound slave- of the power of the dollar.

    The game is very complex. But when anyone has lost, it is quite easy to understand the predicament that gives rise to this feeling of complete and utter defeat.

    Germany has been backed into its own defeat. It will not fight another World War on this cause.

    And this game is certainly far to complex -for any voting population to comprehend.

    No matter what you think you are voting for -in this coming election, you will likely be voting blind.

    This is true because voters in their feeble spectrum do not have the knowledge set mastered, that is required to understand what is at stake, and what all the players are really saying about their aspirations for the country.

    In fact, even if most of the voters are but baited dupes, most of the candidate-players are similarly clueless-dimwits.

    This is why we need the CIA to kill those who get in the way of ignoble PROGRESS, toward Hell in a hand-basket with every good intention and much more learned authority than is even remotely possible.

    let the fools elect their own leaders! LoL

    Don Robertson
    http://MaineArtists.US
    Limestone, Maine

  • Larry from Pittsburgh

    While I agree with most of the article I think it improperly places blame. The Federal Reserve is a private corporation and they should be able to do what they decide is best for their shareholders.

    The blame is with congress as they gave the Fed the monopoly to prey on the people. And congress can stop the insanity simply by once again issuing the nations money.

    Larry

  • Cynical30

    @ Droid:

    How about “Bring out the Guillotine”?

    • http://thefarcebook.blogspot.com Droid

      It would be nice to set a precedent for justice, wouldn’t it? What I don’t understand, just getting back to the East Coast last night, is how all the people here continue schlepping around, asleep, unaware, unconcerned. I live in the mountains, somewhat removed from the activity centers of DC and NYC, but what I’m seeing is a high level of inertia. I almost take comfort in the inertia, but the thing is the status quo is making us sick, as individuals, as a society, and as a closed, Earthly system. The criminals walk free amongst us everyday, yet we are soft. Where are the heroes that rise above? Where are the Tyler Durdens? Where are we?

      • http://thefarcebook.blogspot.com Droid

        You fuck with my future?
        = I fuck with your future.

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