Two Trillion Dollars Lent out by the Fed
by Ian Mosley
Apparently, it’s none of our business who the government is bailing out with our tax dollars. The financial and business website Bloomberg.com reports: “The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.”
That’s not the way it was supposed to work, back when the banks were begging hat in hand for Uncle Sam to start up those printing presses. They were swearing up and down there would be transparency. Once the money started to be doled out, the accountability seems to have disappeared faster than a wino with a $20 bill. At least we know what a wino would do with the money.
The article recalls “Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return… ‘The collateral is not being adequately disclosed, and that’s a big problem,’ said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. ‘In a liquid market, this wouldn’t matter, but we’re not. The market is very nervous and very thin.’ ” (more…)