December 04, 2011

More on that $7.77 trillion Federal Reserve deal with the banks

Last Thursday, I wrote about how the Federal Reserve, in secret, committed itself to $7.77 trillion in support to the big banks. The Daily Show gives more details of the how the rip-off worked. It turns out that the Fed gave the banks money at interest rates of 0.01% (essentially free money) that the banks then used to buy US Treasury bonds. In essence the Fed was borrowing its own money back from the banks at much higher rates than it lent it out to the same banks. Any idiot could make money on such a deal and it should be no surprise that the banks made a quick $13 billion in profits, which they then doled out to their executives as huge bonuses as a reward for their business acumen.

The fact that there has been no outcry against Federal Reserve head Ben Bernanke shows how the entire government and the major media is in the tank for the banks. The secrecy under which the Federal Reserve acts must end. It is a public body that is supposed to work for the public interest. It should not be allowed to become the private slush fund of the oligarchy.


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Meanwhile, conservative pundits continue to tell us that we the people have grown excessively dependent on "entitlement programs" like Social Security and Medicare and blame us for the debt and the deficit. The few people with the courage to speak up against this relentless propaganda are demonized as "feral humans" (as one moronic letter to our local rag put it today) and told to go home because they have "made their point."

It was interesting to note several clips from Fox in Stewart's piece. Presumably, their angle is that this is yet another example of the government being bad. As long as the focus is kept on the government, the people who actually orchestrate its every move remain free to exploit us from the shadows.

Posted by Richard Frost on December 4, 2011 10:00 PM