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April 1st, 2011
The Federal Government Stole Billions From You

So, remember when the Federal Reserve having a "discount window" lending program, that would funnel cash to banks to help them avert a liquidity squeeze?  Any idea who most benefited from that program during the financial crisis?

If you said U.S. banks, you’re wrong. If you said foreign banks, ding ding ding!

According to Bloomberg News, "The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record."

Who exactly are those foreign borrowers?  Our good friends the Chinese, various European institutions and even Libyan-affiliated borrowers.

Bloomberg explains:

Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s "discount window" lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion. [...]

Bank of Scotland Plc, which had $11 billion outstanding from the discount window on Oct. 29, 2008, was a unit of Edinburgh-based HBOS Plc, which announced its takeover by London-based Lloyds TSB Group Plc in September 2008. [...]

Other foreign discount-window borrowers on Oct. 29, 2008, included Societe Generale (GLE) SA, France’s second-biggest bank; and Norinchukin Bank, which finances and provides services to Japanese agricultural, fishing and forestry cooperatives. Paris- based Societe Generale borrowed $5 billion that day, and Tokyo- based Norinchukin borrowed $6 billion. [...]

"The American people are going to be outraged when they understand what has been going on," Rep. Ron Paul (R-TX), chairman of the House subcommittee that oversees the Fed, told Bloomberg TV.

"What in the world are we doing thinking we can pass out tens of billions of dollars to banks that are overseas?" he added. "We have problems here at home with people not being able to pay their mortgages, and they’re losing their homes."

Now, to add insult to injury...the Fed tried to HIDE it from the public.  The Fed and Chairman Ben Bernanke fought for two years to keep this information secret, saying it could lead people to think some banks are weaker than they are...but the Fed eventually had to honor a Freedom of Information Act request.

So, not only were they gonna LIE about what the did, they're also offering the most patronizing reasoning for LYING to you. 

But don't you dare misplace a decimal on that TAX Form Citizen!

Seriously, how much longer is this crap going to be allowed? 

 

 


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