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Largest Banks Likely Profited By Borrowing From Federal Reserve, Lending To Federal Government

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posted on Jun, 2 2011 @ 06:38 AM
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Largest Banks Likely Profited By Borrowing From Federal Reserve, Lending To Federal Government


www.huffingtonpost.com

A newly-released study from the Congressional Research Service bolsters claims that the nation's largest banks profited off the Federal Reserve's financial crisis-era programs by borrowing cash for next to nothing, then lending it back to the federal government at substantially higher rates.
(visit the link for the full news article)




posted on Jun, 2 2011 @ 06:38 AM
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Why has the Federal Reserve been given a pass on this giant Ponzi Scheme?

Well at least someone has the guts to speak up and tell it like it is....


"The Fed was practicing socialism for the rich, powerful and the connected, while the federal government was promoting rugged individualism to everyone else."
said Warren Gunnels, senior policy adviser.

Who could forget that fateful day when the 2008 presidential elections nearly halted as all the players huddled in D.C and agreed to bypass the taxpayers wishes; as they "bailed
out the banks?

This was a raw deal for the taxpayers, who are left holding the bag on unprecedented debt, falling home values, inflation,
a depressed economy, and rampant unemployment.

Another Ah Ha moment for us. Bush was right, it we knew what they had really done behind closed doors, we would drag them into the street and tar and feather them.




www.huffingtonpost.com
(visit the link for the full news article)



posted on Jun, 2 2011 @ 06:48 AM
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The Federal Reserve is a bank in itself. If what you say is true, then essentially the banks borrow from one another. Not really all that new. The United States technically 'borrows' the money from the FR, which is then just added to our massive interest bill to the FR.



posted on Jun, 2 2011 @ 07:32 AM
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Originally posted by burntheships


Why has the Federal Reserve been given a pass on this giant Ponzi Scheme?

Well at least someone has the guts to speak up and tell it like it is....


"The Fed was practicing socialism for the rich, powerful and the connected, while the federal government was promoting rugged individualism to everyone else."
said Warren Gunnels, senior policy adviser.

Who could forget that fateful day when the 2008 presidential elections nearly halted as all the players huddled in D.C and agreed to bypass the taxpayers wishes; as they "bailed
out the banks?

This was a raw deal for the taxpayers, who are left holding the bag on unprecedented debt, falling home values, inflation,
a depressed economy, and rampant unemployment.

Another Ah Ha moment for us. Bush was right, it we knew what they had really done behind closed doors, we would drag them into the street and tar and feather them.




www.huffingtonpost.com
(visit the link for the full news article)


I wholeheartedly agree, it's a giant ponzi scheme.

They should be thrown in jail and the money returned to the citizens.

No wonder Ron Paul is pushing for a complete audit of the Fed. He knows more than he's letting on.



posted on Jun, 2 2011 @ 07:53 AM
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this is how they did it:


During one three-month period in 2009, Bank of America borrowed more than $48 billion at rates ranging from 0.25 to 0.5 percent. Meanwhile, the largest U.S. lender tripled its holdings of Treasuries and other taxpayer-backed debt to about $15 billion -- securities that yielded 3.5 percent.

During the third quarter of 2009, the bank borrowed $2.9 billion from the Fed through a program that charged 0.25 percent interest. In that same period, Bank of America increased its holdings of taxpayer-backed federal debt by $12 billion, according to the Congressional Research Service. Those securities yielded an average of 3.2 percent.

In another period, JPMorgan Chase, the second-largest bank, swelled its holdings of taxpayer-backed federal debt by $20 billion, which yielded 2.1 percent, while at the same time borrowing $29 billion from the Fed at a rate of 0.3 percent.


and the nerve !


"Bank of America provided vital support to the economy throughout the financial crisis and we continue to support businesses and individuals today through our lending and capital raising activities," spokesman Jerry Dubrowski said in an email.

In contrast, during the first year of the Obama administration, small businesses shuttered due to lackluster sales and a lack of credit, foreclosures surged, and credit contracted at one of the quickest rates on record.


no wonder they stopped loaning money to individuals and small businesses !!!

I would too !!



again we got sucker-punched !



posted on Jun, 2 2011 @ 10:21 AM
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reply to post by burntheships
 


IMO the bailouts were used to save the big banks that contribute to politicians pockets while letting the smaller evolving bank (future competitors) fail..

A nice orchestrated cull to make the big banks more profitable..
The facts speak for themselves when you see which banks have failed..

It's nothing but a consolidation of power..
The fact that they profited as you state is just icing on the cake..

S&F



posted on Jun, 2 2011 @ 10:53 AM
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Originally posted by burntheships


"The Fed was practicing socialism for the rich, powerful and the connected, while the federal government was promoting rugged individualism to everyone else."


This is a byproduct of McCarthy-esque fanaticism, where many Americans are brainwashed into thinking that they live in a "free market" and that any type of socialism, communism, (insert your favorite new buzz-word here) is tied to a dictatorship and evil.

What they fail to see, and what is becoming more and more obvious as the relationship between the government and the global financial sector is made more and more flagrant, is that this is all about transfer of wealth (i.e. socialism, communism) exactly as Mr. Gunnels describes.

Tax-paying civilians are forced to transfer their hard-earned wealth to a global banking cartel. When this becomes more and more difficult, this same cartel forces the countries to privatize any and all natural, primary resources that may be a source of wealth to them.

This game has been going on for decades, only I suspect it has become too obvious. The people of Greece, Ireland, Spain and Portugal seem to be waking up and taking to the streets, not to mention the little-spoken of Icelanders who told the corrupt bankers where to shove it.

Hopefully this is a growing trend of enlightenment that will continue to spread.

the Billmeister
edit on 2-6-2011 by Billmeister because: clarity and syntax



posted on Jun, 2 2011 @ 11:24 AM
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reply to post by Billmeister
 


You're right in all the points you made! I agree with you. ... but:

Why do you say you "fear" the game has become too obvious? I'm guessing that you mean that as more a figure of speech than literally? Surely you, like the rest of us here, would prefer the game to be exposed?

I think what you, like the rest of us, really fear is that they'll succeed in covering it all up and continuing their plunder of the economy and the destruction of the Constitution. The lie needs to completely and utterly collapse.

Chaos doesn't frighten me.



posted on Jun, 2 2011 @ 11:38 AM
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reply to post by seaside sky
 


You're right... "fear" is definitely not the best word for the situation... I'll edit for clarity of my position. (plus I noticed an error in syntax while rereading... sheesh!)

I admit that I am optimistic by the amount of information coming to light and the amount of awareness being brought to this situation.

However, the people in power have much to lose if a radical change of the monetary/economic system was to occur, and I fear (this time the word is appropriate) the lengths they are prepared to go to to ensure that the status quo remains the same.

the Billmeister



posted on Jun, 2 2011 @ 11:44 AM
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reply to post by burntheships
 


Excellent. Socialism for the rich, Capitalism for the poor. I saw this happening before my eyes, when all the Republican neo-cons inserted themselves into the tea party movement. They started screaming for lower taxes for corporations, yet were quick to support legislation granting billions from the federal government to wealthy interests, war, and government funded contracts for the elite. At the same time they were cutting off the poor from benefits many citizens needed due to losing their job, home, and investments. A great way to rob everyone. Make the people argue amongst themselves while supporting the largest rip-off of public wealth in the history of the United States.



posted on Jun, 2 2011 @ 11:57 AM
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Weren't these loans just overnight loans?

So they were paid back immediately, then purchasing treasuries purely for purposes of risk management ( not with overnight loan cash ) ?

I will have to read more into this.
edit on 2-6-2011 by Dance4Life because: (no reason given)



posted on Jun, 2 2011 @ 12:04 PM
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I think this article is a bit slanted. I am not an apologist for Ben Bernanke, but this article only tells half the story I believe.

They are totaling the amount of overnight + emergency loans ( most of which were paid back within 24 -72 hours). I am also guessing that treasuries were purchased because they are good in times of trouble.

If you take a look at the 30 Yr Bond Futures from late 2008 you will see this as well. If the Fed wanted to have someone purchase securities they most likely wouldn't beat around the bush. For evidence of this see Maiden Lane I and Maiden Lane II.

30 Year Bond Weekly Chart 2007 - Current



posted on Jun, 2 2011 @ 12:10 PM
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Largest Banks Likely Profited By Borrowing From Federal Reserve, Lending To Federal Government

Who writes those articles? I mean, are they considering this as breaking news?

What's their next reports? Water is wet, the sky is blue, the allies have won WW2?

Seriously... the writer needs to stop saying 3 years old news are new.



posted on Jun, 2 2011 @ 12:10 PM
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reply to post by Billmeister
 


Thanks for the reply! It does seem that the system is in the trouble it so richly deserves, and the panic of those in charge is palpable these days- they're getting desperate and truly scared. They might well be on the brink of losing control of their own monster. There are some good articles out there (especially on Global Research) that strongly suggest that the entire fiat monetary system and globalization is suffering an actual logical collapse from which there is no escape.

Those in power, however, are thoroughly committed to saving their system at all costs of course, and they've had great success in lulling the majority of the people into the state we call "sheeple" One thought that has occurred to me is the possibility that the general dumbing-down we've been watching all over might actually have affected the power elite more than we thought. Certainly the Ivy League education "ain't what it used to be." So what we have now might be the incompetent heirs of the original evil geniuses. If so, there's hope for the future. They will blow it.

But can they "save" their system? How far will they go to try?

You said you fear the lengths they'd go to to maintain the status quo. I'm afraid too-- do you have any specific predictions?



posted on Jun, 2 2011 @ 12:19 PM
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True. The Fed prints out then loans to the commercial banks. The government does not have the power to print its own money, but a private company does.

Any questions on who is exploiting who?


Originally posted by Natasliah
The Federal Reserve is a bank in itself. If what you say is true, then essentially the banks borrow from one another. Not really all that new. The United States technically 'borrows' the money from the FR, which is then just added to our massive interest bill to the FR.



posted on Jun, 2 2011 @ 12:55 PM
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reply to post by daynight42
 


Not correct.

The TREASURY ( something like the office of engraving? ) prints money. In fact most of what you read about this whole thing is misinterpretation / purposeful misinformation.

What the FR does MAINLY is just set interest rate policy. In fact there are plenty of speeches where Fed Presidents have stated that they do not want any more responsibility nor do they think it is a good idea.

If you would like to read more about this you can check out these links. Our real problems start in Washington with your elected representatives. Not the FR, no matter what most drones will tell you.

Cornell Law

Wiki : Open Market Operations (Auction)



posted on Jun, 2 2011 @ 01:30 PM
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Originally posted by Dance4Life
reply to post by daynight42
 


Not correct.

The TREASURY ( something like the office of engraving? ) prints money. In fact most of what you read about this whole thing is misinterpretation / purposeful misinformation.

What the FR does MAINLY is just set interest rate policy. In fact there are plenty of speeches where Fed Presidents have stated that they do not want any more responsibility nor do they think it is a good idea.

If you would like to read more about this you can check out these links. Our real problems start in Washington with your elected representatives. Not the FR, no matter what most drones will tell you.

Cornell Law

Wiki : Open Market Operations (Auction)



The Fed sets interest rates and reserve rates.

Banks lend to each other all the time, with the Fed setting the reserve limit, and this creates a ton of money out of thin air, all of it debt.

Bank A has $1,000 and has to keep 20% in reserve. So they loan $800 to bank B. Bank B loans $640 to Bank C who in turn loans $512 to Bank D.

From $1,000 that Bank A originally had, $1952 ($800+$640+512) was lent out. Imagine this formula on a grand scale equaling the size and complexity of the U.S. economy. The problem is that not all of it can be paid back with interest. The system is designed to be over-leveraged and unless new money comes in, everything crashes hard.

As for the straight printing of money, the Fed purchases bonds from the U.S. Treasury then the Treasury coins the money. Of course the bonds have to be paid back, with interest. The thing is, where does the Fed get the money to buy U.S. bonds? From member banks? How did they get so much damn money to buy hundreds of billion in bonds? Ron Paul wants to know. Either they made the money up or they have been gaming the system for a long time, or both.

So long as the current currency system remains in place, not even Jesus himself can fix things from a political point of view without drastically reforming the currency system.

Speaking of Jesus, throughout history, banks and money-changer types have been viewed with suspicion and if we are to learn anything from history we should view them with suspicion today as well.



posted on Jun, 2 2011 @ 02:06 PM
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reply to post by Dance4Life
 


I have to agree with Vikus

Yes, paper currency is printed by the "U.S. Bureau of Engraving and Printing" and coins are made by the "U.S. Mint", all at the tax-payer's expense mind you, but this is not how the Treasury raises (or "creates" money).

When Congress requires funds from the Treasury, the Treasury creates Bonds, essentially pieces of paper backed by the guarantee that taxes will be collected to pay for the amount of the Bond plus whatever guaranteed interest is added to it.

These bonds are sold to other nations and private banks in exchange for tangible, spendable currency.

The Federal Reserve, in this particular case, used tax-payer "bail-out" money to lend to these private banks at 0.25% interest, so they could be use it to buy T-Bonds with a guaranteed interest of 3.5%. Heck, anybody would jump at the opportunity to do that!

The "elephant in the room" question that is implicit here is "why would a government set-up a system that requires it to borrow money, at interest, from a private bank, that it has the powers and infrastructure to print for itself?".
The short answer is, "what would be in it for the banks?"...
The long answer depends on how much global control you believe these banking entities have had throughout history, and how much influence they have in national governments to influence policy in their favor.

the Billmeister

p.s.
Of course, my understanding may be wrong...
"The process by which money is created is so simple that the mind is repelled." - John Kenneth Galbraith



posted on Jun, 2 2011 @ 02:15 PM
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reply to post by seaside sky
 


I'm not qualified to make predictions.

However, in order to maintain the status quo, you really only have to ensure a certain amount of influence on very few people... those in government. My cynical stance is that the system has been set-up to ensure that anyone wanting to "stir the pot" as it were, is filtered out before they can get into a position where changing the status-quo is possible.

We'll have to wait and see.

That said, I am, to a certain level, a hypocrite.
If I compare myself to a vast majority of the world, I am very rich (though very much middle class here) and amazingly lucky to have the living standards that I have.
From an ideological standpoint, yes, I believe the system needs change, but if that change means me having to give up my freedom and quality of life, I'm not sure what choice I would ultimately make.

the Billmeister



posted on Jun, 2 2011 @ 03:20 PM
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Originally posted by burntheships
Another Ah Ha moment for us. Bush was right, it we knew what they had really done behind closed doors, we would drag them into the street and tar and feather them.


Color me surprised.... not!

We need to take all these banksters and globalists and make Solyent Green out of them... let them be useful for one thing in their whole lives besides creating misery.

That would be poetic justice.



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