For a book about central banking Griffin's book is a surprisingly easy read and very informative.
Posted on 02/09/2014 7:58:51 AM PST by Errant
The Federal Reserve (or Fed) has assumed sweeping new powers in the last year. In an unprecedented move in March 2008, the New York Fed advanced the funds for JPMorgan Chase Bank to buy investment bank Bear Stearns for pennies on the dollar. The deal was particularly controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of the New York Fed and participated in the secret weekend negotiations.1 In September 2008, the Federal Reserve did something even more unprecedented, when it bought the world’s largest insurance company. The Fed announced on September 16 that it was giving an $85 billion loan to American International Group (AIG) for a nearly 80% stake in the mega-insurer. The Associated Press called it a “government takeover,” but this was no ordinary nationalization. Unlike the U.S. Treasury, which took over Fannie Mae and Freddie Mac the week before, the Fed is not a government-owned agency. Also unprecedented was the way the deal was funded. The Associated Press reported:
“The Treasury Department, for the first time in its history, said it would begin selling bonds for the Federal Reserve in an effort to help the central bank deal with its unprecedented borrowing needs.”2
This is extraordinary. Why is the Treasury issuing U.S. government bonds (or debt) to fund the Fed, which is itself supposedly “the lender of last resort” created to fund the banks and the federal government? Yahoo Finance reported on September 17:
“The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters.”
(Excerpt) Read more at marketoracle.co.uk ...
Not debt, just money.
They recently blasted out a brag to the world that they have a $4.3 Trillion Dollar Surplus!
No they didn't.
Separating the Fed from Treasury, or Wall Street Banksters, for that matter, is like trying to scrape gum off the bottom of your shoe. lolol
That was Bear Stearns, trading at $2, bought for $10 a share.
That is all that is going on: sensible, normal transactions that are not easy to explain or understand without an understanding of how financial markets and the US government work.
As for the Fed being privately owned, that is a legal fiction and is not the equivalent of the Fed being a profit making private bank. Fed member banks are simply not proprietary shareholders who get dividend payments. In substance, the Fed is a government controlled entity with a high degree of independence as to monetary policy.
Experience in the US and around the world shows that such independence for central banks works best because the alternative -- putting politicians in charge -- too often means giving venal, ambitious, and stupid people control of the financial system.
The better criticism is that, with Obama's economic policy being so bad, the Fed has taken up the slack using its interest rate and monetary powers. In order to alleviate financial stress by creating and issuing new money, the Fed lent great sums to Wall Street and to the banking industry and made vast purchases of not just government debt but also debt issued by corporations.
The result was a flood of money and credit that helped to keep the recession from getting worse -- and also gave people with wealth the ability to become wealthier by borrowing and buying up assets that are at historically low valuations. The stock market boomed and real estate prices stabilized and sales have ticked up. This policy of cash and credit for the wealthy was supported by Obama and his Treasury Department.
That is the real scandal: Obama's economic policies have helped the rich get richer. The Republican alternative -- letting markets clear, tax cuts, and spending restraint -- would have worked better to combat recession and would have generated widespread gains in employment and wealth at all levels. That is what happened under Reagan, with widespread prosperity instead of the Obama recovery for the rich.
I agree, Ellen’s articles are like old gum.
In order to alleviate financial stress by creating and issuing new money, the Fed lent great sums to Wall Street and to the banking industry and made vast purchases of not just government debt but also debt issued by corporations.
The only debt they bought, besides Treasuries, were guaranteed MBS.
Yep, her pieces do have a way of sticking.
And full of silly errors.
Tell us, please.
Just buying the bills citizens wont buy.
Lasted traded March 14, 2008 at $30, deal was agreed to and announced at $2, revised about a week later at about $10.
Imagine every time you got a big credit card bill an application for a no fee, no interest transfer credit card came in the mail with it. Imagine that application was pre-approved and immediately available (even with checks in your name included!). That’s this.
He thinks banks don’t want you to repay your loan.
He thinks that when you default on a loan, the bank doesn’t care, because they created the money out of thin air.
He thinks a bank with a $100 deposit can make a $900 loan.
“That is all that is going on: sensible, normal transactions ...” So long as you can get the sheeple to continue believing that lie, the Ponzi scheme continues until the globalist decide to crash the system for a reset. There is no money in circulation, only currency, and that system is the Ponzi which builds wealth for the banking powers, not the people.
http://www.phoenixrealestateguy.com/bear-stearns-collapse-159share-to-2-in-365-days/
True enough, but not a refutation of my point. A further complication is that during the crisis of 2008, the Fed issued an $85 billion line of credit to keep AIG afloat and secured that line of credit by warrants for just under 80% of the company’s stock. In a pinch, the Fed will do as it thinks necessary and Congress is unlikely to countermand its decisions.
I was told (by a JPM Vice President) that Treasury Secretary Paulson called Dimon on the weekend, asking him to buy the bank, I forget which one. Dimon told Paulson he did not want to buy the bank, and that he was at a family function, and hung up on the Secretary. By Monday morning, though, the ink was dry on the contract.
JP went through the books over a weekend and valued it way low but paid more because they and the Fed were afraid what the public’s perception would be.
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