Kucinich: 'Is the Fed paying banks not to loan money?'

Kucinich: 'Is the Fed paying banks not to loan money?'

rawstory.com

“Is the Fed paying banks NOT to loan money?” a Kucinich media advisory pondered.

To support his line of questioning, he cited a Bloomberg report which noted that “banks’ excess reserves at the Fed rose to a record $877.1 billion daily average in the two weeks ended May 20, from $2 billion a year earlier.

“Excess reserves — money available for lending that banks choose to leave with the Fed instead — averaged $743.9 billion in the first two weeks of this month,” the report continued.

(visit the link for the full news article)

Boy, it's a good thing these banks got that bailout (TARP) money, otherwise how could they have ever gotten this record in reserve money in the Fed!

So, now that these banks got this bailout, to help people stay in their homes and make loans, all they are doing with this money is letting it sit in the Federal Reserve and earn interest!

He continued: “If TARP isn’t about keeping people in their homes or providing credit to businesses, what is it for? I think the vast majority of Americans would be outraged to learn their tax dollars were facilitating hoarding at the Fed and increased profit making for banks.”

This is how you fix the economy?

I don't think so!

I think we just witnessed the biggest heist ever!!

rawstory.com
(visit the link for the full news article)

[edit on 7/21/2009 by Keyhole]

Here's a couple articles that TRY to explain why the banks are hoarding all this money, ...

TARP shortchanges small business as banks hoard cash and don’t loan

Under normal circumstances, these SBA guarantees surely increase the amount of available credit for small businesses by making banks more confident that the loans will be repaid. But banks are less concerned about repayment from longtime customers than they are about the need to hoard cash in an effort to satisfy arbitrary requirements placed on them by government bureaucrats.

So, according to this statement, our government, who gave these banks this bailout money, is requiring these banks to "hoard" this money now in order to show they are a solvent banks?

Bernanke May Hold Rates Down by Showing He Can Reverse Course

While policy makers would like credit markets to recover, they don’t want banks to lend that cash out all at once as the economy improves, because that could unleash inflation, said William Poole, former president of the St. Louis Fed. So the central bank is counting on its ability to pay interest on those reserves to help keep a lid on prices.

“Interest on reserves is an important part of the exit strategy,” Fed Vice Chairman Donald Kohn said at a conference at Princeton University May 23.

I guess Kucinich is right!

The Federal Reserve IS paying banks NOT to loan out any of the bailout (TARP) money!

So there you have it, in order to keep inflation down, the Fed is paying these banks interest on all these billions of dollars that OUR GOVERNMENT gave them!

Talk about making money the easy way!

I wish somebody would give me a couple billion dollars so that I could just collect the interest!

[edit on 7/21/2009 by Keyhole]

The FedGov watchdog is complaining, loudly, that the banks who took TARP funds in order to "unseize" the credit markets have used the money instead to purchase other banks, invest in the markets, and essentially do everything but extend credit.

The FedRes is saying that they are worried about inflation, as well they should be, given the massive increase in the money supply. In response, they are paying interest to banks as a means of encouraging said banks to keep their funds in the reserve account. This prevents the dollars from entering circulation, resulting in price inflation.

Monetary policy is competing with fiscal policy. The FedGov wants the economy to recover, so they are trying to encourage spending. The FedRes knows that if those TARP funds (along with the stimulus dollars) enter the economy, the dollar will devalue massively, due to the wonder of monetary inflation. The FedRes, as well as the lenders (!), do not want borrowers, including FedGov, paying back debts with inflated dollars.

The taxpayer citizen is getting pinched.

it seems like this is all the more reason to audit the fed. if we can see where their money is going, we'll be able to establish if they are doing this. i am sick to death of their games. i'm sure they have done some good things over the decades, but not lately. we need to hold them accountable for their part in this mess.

reply to post by kreinhard


So this just makes you wonder, why was it soooo important that TARP got rushed through congress sooo fast!

And also, why did the Fed Res feel it was sooo important that this bailout happened when it appears that it is just costing them money (in interest payments)?

This whole thing just stinks to high heaven!

[edit on 7/22/2009 by Keyhole]

reply to post by Keyhole

So this just makes you wonder, why was it soooo important that TARP got rushed through congress sooo fast!

Now add your question to my question.

Why did a Republican President doom a Republican candidate by asking for 700 Billion and not even give McCain a heads up on what he was about to do?

Originally posted by Keyhole
reply to post by kreinhard

 

So this just makes you wonder, why was it soooo important that TARP got rushed through congress sooo fast!

And also, why did the Fed Res feel it was sooo important that this bailout happened when it appears that it is just costing them money (in interest payments)?

This whole thing just stinks to high heaven!

[edit on 7/22/2009 by Keyhole]

Great thread!

I would wager that, to coin a phrase, the devil is in the details.

The massive legislation that our representatives half-joked about not reading contains the seeds of another scam, I wager.

Too bad we won't find out until it's too late.

My next door neighbor went out to buy a new car. She had 50% for the down payment. Perfect credit, like 750+ rating. Went to her own bank. No money to lend. Went to three others same answer. This women owns her home outright. Couldn't even get a home equity loan out of her bank she has been with for 40+ years. Something is rotten in the banking industry and we are being played like a bad record!

Zindo

Originally posted by earlywatcher
it seems like this is all the more reason to audit the fed. if we can see where their money is going, we'll be able to establish if they are doing this. i am sick to death of their games. i'm sure they have done some good things over the decades but not lately. we need to hold them accountable for their part in this mess.

Like making you nothing more than a slave to debt from money they created out of thin air? cause wars which have killed millions? starved millions of people all over the world? There is NOTHING about central banks such as the federal reserve or Bank of England etc have done that was good for humanity,a good portion of everything we think is wrong with the world stems from these people.As for this article,there was a video of a congressman asking the same thing just posted two days ago i think in which Bernanke says the money went to european banks...but he didn't know which ones,nearly a trillion handed out and he doesn't know which banks?

[edit on 22-7-2009 by Solomons]

Originally posted by Maxmars
Great thread!

Thanks

I would wager that, to coin a phrase, the devil is in the details.

The massive legislation that our representatives half-joked about not reading contains the seeds of another scam, I wager.

Too bad we won't find out until it's too late.

Here's a conspiracy theory for you, ...

Could it be that the Federal Reserve were the ones that wanted that money to begin with?

After all, they pushed for this TARP bailout for the banks, but once the banks get the money, they tell them that they should "keep it in reserve" at the Fed Res or they might cause inflation!

So now the Federal Reserve has got all this money to invest in anything they want and make millions/billions of dollars!

I'm sure all that money isn't just sitting there in the Fed Res and not being invested in something, otherwise how would they be able to pay interest to all these banks who are keeping their money there!

Something about this just doesn't smell "right"!

[edit on 7/22/2009 by Keyhole]

Originally posted by ZindoDoone
My next door neighbor went out to buy a new car. She had 50% for the down payment. Perfect credit, like 750+ rating. Went to her own bank. No money to lend. Went to three others same answer. This women owns her home outright. Couldn't even get a home equity loan out of her bank she has been with for 40+ years. Something is rotten in the banking industry and we are being played like a bad record!

Zindo

Zindo, I like you, but your neighbor is a liar!

I just bought a car with mediocre credit and no downpayment! There is no bank in the world that won't loan with a 50% down payment!

Home equity market is shot, so I can buy that one! But if the car story were true, they would not be selling any cars at all!

Originally posted by jam321
reply to post by Keyhole

 

So this just makes you wonder, why was it soooo important that TARP got rushed through congress sooo fast!

Now add your question to my question.

Why did a Republican President doom a Republican candidate by asking for 700 Billion and not even give McCain a heads up on what he was about to do?

The easy answer to this one is that it has nothing to do with party politics and everything to do with a very specific agenda. Whether an R or a D, it doesn't matter. You're either on the team pushing the agenda or you're not. McCain apparently wasn't on the team... but Obama seems to be.

There is no money. It's all just numbers in computers anyway. They have just decided to quit sending numbers from their computers accounts to your computer accounts.

Oh and you can bet there is a plan. It involves us begging them to transfer food to our mouths instead of begging for those numbers to be transferred.

Been planned for a long long time, to perfection.

Coming from someone who is more familiar than the average person with respect to financial markets, I am sorry to say that the TARP bailout was necessary...If we did allow all of those banks to fail, complete chaos and extreme catastrophe would have ensued. All major financial institutions like hedge funds and other investment firms have accounts with all of these big banks. If they would have failed, then everyone would have had to effectively sell all of their assets because everything they own is within the accounts of banking giants. This massive sell-off would have resulted in all of the major indices (DOW, S&P, NASDAQ) plummetting. I am talking extreme collapse like the DOW going down to 2,000. Anyway, I am in now way justifying following/preceding measures taken by these banks and the Fed to prevent this from happening (again). Oversight of mortgages and mortgage backed securities was insufficient, and giving the Fed more authority and obligations will not resolve this issue, but only exacerbate it. If the Fed was incapable of regulating what that which they were already assigned, how are they going to be able to cope with an increase of responsibility?

Banks were giving out risky loans with little or no down payment, and consumers were accepting these loans. Being the more financially literate party, the banks should have rejected the mortgages and simply said "No." Yet, everyone was lost in the real estate bubble, assuming home prices would continue to rise; essentially concluding with a misguided notion of a profitable investment for both the buyer and the bank. As we have all found out, they were both wrong. The buyer, unfortunately, does not have a job, nor a house, while the banker probably has a bigger house because prices are so cheap, and has managed to create a safety net for HIS job, knowing that the country will provide assistance for him whenever he deems necessary. Ironically, this was effectively instituted as a direct consequence of his irresponsibility, but at the expense of the taxpayer.

Originally posted by 1 4M 7H3 1
I am sorry to say that the TARP bailout was necessary...If we did allow all of those banks to fail, complete chaos and extreme catastrophe would have ensued.

I understand we actually couldn't let them fail, but why the rush to give them soooo much money that THEY can't even use?

There's the problem I have with this!

Why did TARP have to give them so much money that these banks now have "a record $877.1 billion" in reserve at the Fed Res?

Seems a little "over the top" to me!

Now they just get to collect interest on this money while it sits there!

Also, doesn't the Fed Res make "investments" with this money?

Seems like a win, win situation for them!

They got to print the money, it all is supposedly going to be paid back, then the Fed Res gets to keep this money "in reserve" for these banks who got these TARP funds, and invest it as they see fit, making tons of money!

Pretty sweet deal if you ask me!

[edit on 7/22/2009 by Keyhole]

reply to post by 1 4M 7H3 1


And thats exactly what they wanted you to think,so they could monopolize the market and buy up financial institutions and force though a more central world bank ie the IMF that have killed tens of millions of Africans through their actions and have them in a grip of perpetual debt.Its nothing but a giant scam run by gangsters when you strip away all the layers.All you need to do is look at the source of the monetary system,forget all the financial *talk*.If you can't dazzle them with brilliance baffle them with BS.

[edit on 22-7-2009 by Solomons]

We're all being screwed..plain and simple. The evidence is so overwhelming at this point that I don't see how anyone can even dispute this anymore.

There is no defending this garbage anymore...nor defending Obama's excuse to give the Federal Reserve even more power.

Obama is bought...yet STILL....with all of the evidence and facts that have come out over the last few months....PEOPLE STILL DEFEND THIS.

Still!! People need to get out of "Defend Obama Mode" and start investigating themselves instead of just ignoring any info that comes out as rubbish.

reply to post by David9176


so true. i'm posting to the "obamagate" thread and it has degenerated into review of why obama doesn't need to prove eligibility and he inherited all the problems from bush. very hard to get the defenders to talk about what has happened since the election. obviously bush started the bailout frenzy but obama has orchestrated it into something quite huge with vast ramifications. though i watched a documentary a couple of years ago about the IMF and was really appalled at the harm they have done under the guise of helping. any more power given to the banking cartel is disastrous.

i have no idea how this will shake out but we must find a way to stop what is happening. stop it in its track. we don't have time to wait until the next election. things are getting critical.

The Banks were 'Busted Out', the same way the Savings and Loans were in the 1980's. The big money ends up in the hands of the big crooks and the Tax Payers put it all back in the piggy bank to wait for another golden goose to come along.

The Credit Markets are frozen, and the Fed is having the banks keep the money in the Fed to keep it from being monetized.

They know inflation will go up dramtically as they release that money and in the meantime they simply want to keep forcing consumer spending down and savings up.

The sad thing is the nation really needs jobs and they could have created alot by making that Bailout Funds available to small business and entrepenuers who do hire domestically and often pay living wages.

Our Government has become nothing but a criminal enterprise with our law enforcement and military acting in the role of 'enforcers' not of the law, but the looting and raping of the treasury domestically, raw materials and cheap labor internationally, and forced investment in the enterprise.

So much for the 'Home of the Free and the Brave'.