(reprinted from RT.com)
We knew the last bailout from the Federal Reserve was pretty big, but not until now did we have statistics on the actually tally. If you thought that the $700 billion bailout for TARP was big, get a load of this.
Just exactly how big was the Federal Reserve’s bailout of the banks between the years of 2008 and 2010? Thanks to a Federal Request of Information Act gone fulfilled, America now knows the truth behind a colossal cover-up: almost $8 trillion.
Ever since the Fed stepped in to bail out the biggest banks in the country, Ben Bernanke and company have gone to great lengths to keep the exact details of the transactions a secret, citing that the truth would cause concern for the world financial crisis far greater than what was already at hand, saying in particular that investors would step away from the “too big to fail” banks that were benefiting from the bailout. And while Fed Chairman Ben Bernanke went on the record to call the bailouts to even the most “sound institutions” only “marginal,” details of the FOIA request obtained by Bloomberg News now reveals that the Federal Reserve spent nearly half of the entire production output of the US during that span of less than two years — the biggest bailout in the country’s history — while going to great lengths to keep Congress and the American people in the dark.
By March of 2009, the Fed had already dished out $7.77 trillion to save the US financial system, dwarfing other assistance programs several times over. As the financial sector was on the brink of collapse, neither the Fed nor the banks involved came clean with the truth, instead lying through their teeth to keep the total facts a mystery. Until now.
While the banks kept the bailout a secret from Congress, they lobbied to the Legislative Branch to imply more lax governmental regulations on the industry, something that would haven arguably been near impossible had the truth surfaced at the time.
The website Naked Capitalism explains it pretty clearly in not so many words: “The bottom line is everybody close to the process lied like crazy.”
On November 26, 2008, Bank of America Chief Executive Officer Kenneth D. Lewis told shareholders that he ran “one of the strongest and most stable major banks in the world.” On that very day, BofA was indebted to the Fed something to the tune of nearly $90 billion. Less than two weeks later, the Federal Reserve blew $1.2 trillion total in a single day to bail out the breaking financial institutions.
All the while, of course, banks were borrowing loans at interest rates of as low as 0.01 percent. “No one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates,” writes Bloomberg now.
That’s not the worst part, either. As the Fed continues to operate without oversight from the Executive, Legislative and Judicial branches, further bailouts are guaranteed to keep being generated at the cost of the American taxpayer while a recession still seems imminent — if not already occurring. Critics including presidential hopeful Congressman Ron Paul have lobbied to abolish the Federal Reserve once and for all. Could the next president help make that dream a reality? In the meantime, don’t be surprised if billions get borrowed at America’s expense minute by minute.
- Fed secretly handed out $8 trillion (rt.com)
- Explosive Bloomberg Report Details Fed’s Monster Bank Bailouts: $7.77 Trillion (my.firedoglake.com)
- Fed Loaned Banks Trillions in Bailout, Bloomberg Reports – ABC News (blog) (abcnews.go.com)
- Bloomberg: Bank of America received massive Fed rescue (bizjournals.com)
- Banks Benefited From Nearly $8 Trillion Bailout (ibtimes.com)
- Fed lent banks trillions during crisis, report says (bottomline.msnbc.msn.com)
- Did you hear about the $7 trillion secret Fed bailout of the banks? Yeah, neither did anyone else. (americablog.com)
- Fed’s Secrecy During Crisis Limits Effort to Stop Another: View (businessweek.com)
- REVEALED: More Details On The Fed’s Breathtaking $7.7 Trillion In Loans To Large Banks (tarpon.wordpress.com)
- REVEALED: More Details On The Fed’s Breathtaking $7.7 Trillion In Loans To Large Banks (businessinsider.com)