Money For Everybody
Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007 said “The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation.” Well, in case you missed it, the Fed was forced to release who it’s been lending to during their bailout craze and the “caricature” appears to be completely correct.
As Bloomberg reports:
“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.”
Indeed, one of these foreign banks was Arab Bank Corporation owned by the Libyan central bank as I mentioned in a previous post. The same Libya we’re bombing the hell out of.
Regardless though, this is obviously unprecedented for the Fed to make this many bailout loans at under market rates, especially to foreigner banks. As Ron Paul asked, “What in the world are we doing thinking we can pass out tens of billions of dollars to banks that are overseas? We have problems here at home with people not being able to pay their mortgages, and they’re losing their homes.”
Yes, what are we doing? So for the record, this is reason number 1497 that the Fed is simply out of control.
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