{"id":10161,"date":"2012-08-31T00:20:03","date_gmt":"2012-08-31T04:20:03","guid":{"rendered":"http:\/\/www.nhteapartycoalition.org\/tea\/?p=10161"},"modified":"2012-09-07T12:24:16","modified_gmt":"2012-09-07T16:24:16","slug":"sugar-daddy","status":"publish","type":"post","link":"http:\/\/www.nhteapartycoalition.org\/tea\/2012\/08\/31\/sugar-daddy\/","title":{"rendered":"SUGAR DADDY"},"content":{"rendered":"

The Fed Looks After Its Own<\/strong>
\nby Gary Larson, Exclusive to NHTPC<\/em><\/p>\n

\"\"<\/a>

Foreign Banks Now Own USA<\/p><\/div>\n

Following criticism of its handling of the financial crisis of 2008, a partial audit of the Federal Reserve was conducted by the non-partisan Government Accountability Office (GAO) in 2011. The first of its kind audit was vigorously resisted by the Fed. Considering what it uncovered, it is easy to see why. The audit revealed that the Fed, acting without Congressional approval, has created an enormous amount of new money and has been busily handing it out like candy on Halloween. \u201cAs a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Senator Bernie Sanders (I-Vt.) when the first part of the audit came out in July. The Troubled Asset Relief Program (TARP) originally authorized expenditures of $700 billion, but the Fed took advantage of a clause in its charter that allows it to act independently of Congress and disbursed over 20 times that amount. <\/p>\n

\u201cNo agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president.” Sanders said, adding, “This is a clear case of socialism for the rich and rugged – you\u2019re-on-your-own individualism for everyone else. The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street.”<\/p>\n

Below is a list, from page 131 of the GAO report, of the institutions that were secretly showered with bailout money between December 1, 2007 and July 21, 2010.<\/p>\n

These are cumulative totals that cover all the loans made from the beginning of the bailouts until the program was terminated. It reveals the magnitude of the effort extended to rescue Wall Street:<\/p>\n

Citigroup – $2.513 trillion
\nMorgan Stanley – $2.041 trillion
\nMerrill Lynch – $1.949 trillion
\nBank of America – $1.344 trillion
\nBarclays PLC – $868 billion
\nBear Sterns – $853 billion
\nGoldman Sachs – $814 billion
\nRoyal Bank of Scotland – $541 billion
\nJP Morgan Chase – $391 billion
\nDeutsche Bank – $354 billion
\nUBS – $287 billion
\nCredit Suisse – $262 billion
\nLehman Brothers – $183 billion
\nBank of Scotland – $181 billion
\nBNP Paribas – $175 billion
\nWells Fargo – $159 billion
\nDexia – $159 billion
\nWachovia – $142 billion
\nDresdner Bank – $135 billion
\nSociete Generale – $124 billion
\n“All Other Borrowers” – $2.639 trillion<\/p>\n

What did the banks do with the bailout money? Many of them refuse to say, but the GAO has revealed that 48 percent of the banks have repaid some of the bailout money from other federal programs. Those programs include the Community Development Capital Initiative and the Small Business Lending Fund, both of which were designed to stimulate local economies and increase lending to small businesses. This follows a lobbying effort by the Independent Community Bankers of America, to switch money “from one Treasury program to the other” – presumably to get a better interest rate. While small businesses, which are the backbone of the economy struggle to get credit, banks have been using money designated for them to pay back the first bailout bonanza.<\/p>\n

Federal Reserve chairman Ben Bernanke has justified the bailouts by claiming, that propping up Wall Street has saved “main street.” According to Ben, by coming to the rescue of the “too big to fail” he has averted another worldwide Great Depression.<\/p>\n

Considering that a number of economic indicators point to an economy in a state of contraction – rising unemployment, millions of Americans on public assistance and a record number of new homes going into foreclosure – the best that can be truly said is that it has merely forestalled an economic collapse. <\/p>\n

Following the bursting of the dot.com bubble in March of 2000, the Federal Reserve, in an effort to stimulate the economy, lowered interest rates. This encouraged reckless lending and borrowing by commercial banks and the public. As tons of new money flooded the economy, much of this new money began to flow into real estate, fueling a housing boom. Like all economic bubbles it was inevitable that it would grow so big that it would eventually burst. When it did, the banks which held bad mortgages were rapidly becoming insolvent, so the Fed acted to bail them out.<\/p>\n

Where did the Fed get the money for its “heroic” rescue?
\nIt created it out of nothing.
\nIt is money that did not exist before the Fed created it .
\nIt can do so because America has adopted a fiat money system. Fiat money has no intrinsic value beyond the power of government to mandate it as a medium of exchange. It is not fixed in value in terms of any universally recognized standard, such as gold or silver, which in practice, would limit how much can be created.<\/p>\n

The Fed has been empowered by law to act independently of any political power or legal restraint on it’s ability to create endless amounts of this “free” money to utilize as it deems necessary. <\/p>\n

It’s an old adage that “nothing is free,” and all this newly created money comes at a hefty price that will be paid for by the public through the “hidden tax of inflation.” Economists have long recognized that when the money supply is increased, it dilutes the value of all money, therefore requiring more of it to purchase goods and services.Those who receive the initial infusion of newly created money get the benefit of it’s full purchasing power. By the time it has worked it’s way into the economy at large, it has done it’s damage to prices. What consumers see as rising prices is often a result of monetary inflation by the Fed and commercial banks.<\/p>\n

The investment firms and commercial banks which were the recipients of the Feds largess occupy a highly privileged position within the Federal Reserve system. The Fed has always acted to protect them first and foremost and the welfare of the general public second – if at all. There have been numerous instances over the years where the Federal Reserve as “lender of last resort” has acted to bail out insolvent banks – usually the large banks – while letting smaller banks fail. This has induced the moral hazard of the big banks making risky loans with the assurance that the Fed or taxpayers would cover their losses. Bailing out insolvent banks, far from being a rare event, has been done many times and is a major reason that the Federal Reserve System was created<\/p>\n

Here is how G. Edward Griffin describes the process in his book “The Creature From Jekyll Island” :<\/p>\n

…”the Jekyll Island group which conceived the Federal Reserve System actually created a national cartel which was dominated by the larger banks….a primary objective of that cartel was to involve the federal government as an agent for shifting the inevitable losses from the owners of those banks to the taxpayers…….The central fact to understanding these events is that all the money in the banking system has been created out of nothing through the process of making loans. A defaulted loan, therefore, costs the bank little of tangible value, but it shows up on the ledger as a reduction in assets without a corresponding reduction in liabilities. If the bad loans exceed the size of the assets, the bank becomes technically insolvent and must close it’s doors. The first rule of survival, therefore, is to avoid writing off large, bad loans and, if possible, to at least continue receiving payments on them. To accomplish that, the endangered loans are rolled over and increased in size. This provides the borrower with money to continue paying interest plus fresh funds for new spending. The basic problem is not solved, but is postponed for a little while and made worse.”<\/p>\n

The final solution on behalf of the banking cartel is to have the federal government guarantee payment of the loan should the borrower default in the future. This is accomplished by convincing Congress that not to do so would result in great damage to the economy and hardship for the people. From that point forward, the burden of the loan is removed from the banks ledger and transferred to the taxpayer….<\/p>\n

Should this effort fail..the last resort is to use the FDIC to pay depositors….when these funds run out, the balance is provided by the Federal Reserve System in the form of freshly created new money. This floods the through the economy causing the appearance of rising prices but which, in reality, is the lowering of the value of the dollar.<\/p>\n

The final cost of the bailout, therefore, is passed to the public in the form of a hidden tax called inflation.”<\/em><\/p>\n

Helping people avoid foreclosure and stay in their homes was one of the justifications given for the bailouts, yet little of this money has found its way into the hands of the general public. With literally trillions of dollars being handed over to cover their bad gambling debts, there is little mystery why many banks are reporting record profits- all this while average Americans are struggling just to survive. <\/p>\n

Now some of those same interests are getting ready to enrich themselves even more by purchasing huge blocs of foreclosed homes enmasse. At the urging of the Federal Reserve, the Federal Housing Finance Agency (FHFA) has announced a pilot program to auction off blocs of hundreds of thousands of foreclosed homes currently owned by HUD, Fannie Mae and Freddie Mac- on the condition that they turn them into rental properties. On April 5, 2012, the Fed loosened restrictions on commercial banks so “banking organizations may choose to make greater use of rental activities in their disposition strategies.” In a white paper entitled The U.S. Housing Market: Current Conditions and Policy Considerations the Fed paints a bleak picture of the real estate market and notes that \u201ccurrently, about 12 million homeowners are underwater on their mortgages \u2014 more than one out of five homes with a mortgage.\u201d Many of those homes will eventually go into foreclosure. Once a property has been taken over by a lender through the foreclosure process it is often called “real estate owned,” or REO, property. The Fed claims \u201ca government-facilitated REO-to-rental program has the potential to help the housing market and improve loss recoveries on REO portfolios.” The paper appeared to hint at providing some sort of public financing for the deal suggesting that \u201cSubsidized financing provided by the REO holder may increase the sales price of properties” and that, \u201cproviding investors with debt financing will likely also affect the prices they offer on bulk pools of REO properties.\u201d <\/p>\n

Of course, none of this will be available to the millions of Americans who are being foreclosed on, presumably many of whom would like to qualify to buy these hugely discounted properties -or at least be offered a workable mortgage reduction on their current home.<\/p>\n

The price of admission to this mega-auction?
\nA minimum of $1 billion.<\/p>\n

Homeless Americans need not attend.<\/p>\n

Who has the Bailout Money? Foreign Banks & Corporations<\/strong>
\nPartial replication for educational purposes under Fair Use.<\/p>\n


\n<\/param><\/param><\/param><\/embed><\/object><\/center><\/p>\n

0:20 Senator Bernie Sanders questions Ben Bernanke
\n0:39 Ben Bernanke won’t tell Congress where the money went
\n0:40 Rep. Alan Grayson comments on Ben Bernanke
\n0:54 Rep. Alan Grayson questions Donald Kohn
\n1:35 Rep. Alan Grayson’s commentary about $1.2 Trillion
\n2:03 Trends Forecaster, Gerald Celente, states $20 Trillion in bailout money went to foreign banks and large corporations.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The Fed Looks After Its Own by Gary Larson, Exclusive to NHTPC Following criticism of its handling of the financial crisis of 2008, a partial audit of the Federal Reserve was conducted by the non-partisan Government Accountability Office (GAO) in 2011. The first of its kind audit was vigorously resisted by the Fed. Considering what […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,7,8],"tags":[],"class_list":["post-10161","post","type-post","status-publish","format-standard","hentry","category-internationalism","category-opinions","category-articles"],"_links":{"self":[{"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/posts\/10161","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/comments?post=10161"}],"version-history":[{"count":8,"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/posts\/10161\/revisions"}],"predecessor-version":[{"id":10201,"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/posts\/10161\/revisions\/10201"}],"wp:attachment":[{"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/media?parent=10161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/categories?post=10161"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.nhteapartycoalition.org\/tea\/wp-json\/wp\/v2\/tags?post=10161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}