Audit Reveals Fed Bailout of Foreign Banks Cost Trillions

Posted by Greg Scott _Featured_, Economy Friday, December 3rd, 2010

Ron Paul's Federal Reserve audit weakened but bearing fruit

Over $10 trillion was given to the Federal Reserve and member banks and trillions more went to foreign banks. This information was disclosed thanks to the bill introduced by Congressman Ron Paul (R-Texas) which proposed making the Federal Reserve transparent and subject to audits but the final version had been stripped down.

Senator Bernie Sanders (I-Vermont), a self described socialist, had been responsible for gutting the bill but now may be having second thoughts. He stated, “Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”

Merrill Lynch got the biggest instant loan for $2 trillion but it still could not stay afloat and was aquired by Bank of America. The banking industry felt the actions were necessary to keep liquidity and stability in the financial system. Mortgage-backed securities and commercial paper were also added to the list of troubled assets that were purchased.

The foreign banks took advantage of this opportunity to dump their toxic assets on the Fed including Deutsche Bank for $300 billion, Credit Suisse for $290 billion for a total of over $1 trillion.

The Federal Reserve Act’s “unusual and exigent circumstances” provision allowed them to also pay non-banking institutions. GE, McDonalds, and Harley Davidson got their take.

Campaign for Liberty President, John Tate said, “It’s time to permanently end the Fed’s shroud of secrecy.”

Source: The New American

Photo: Justin Ruckman’s Flickr Photostream

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Posted by Greg Scott on Dec 3 2010. Filed under _Featured_, Economy. You can follow any responses to this entry through the RSS 2.0. Responses are currently closed, but you can trackback from your own site.