

Federal reserve admits it doled out trillions of tax dollars to foreign banks - Sandman
http://pubrecord.org/nation/8622/pentagon-papers-wall-street/

======
ars
Even if you believe him - which I don't, it wasn't doled out, it was loaned -
at apparently normal rates for the fed, and to large central banks (i.e.
creditworthy). Near zero rates? Baloney. 0.25% interest is the normal market
rate for such banks - but of course he doesn't actually say 0.25 he says "near
zero".

12.3 trillion? What is this an Austin Powers movie?

There's around 10 trillion dollars of money in the _entire_ US! (M2 and lower
money supply.) And around 50 trillion in total assets.

~~~
bsk
Some people like to go big ;-)

So you say an audit of the Federal Reserve is not necessary?

~~~
rms
I'm concerned that an audit of the Fed could hasten the collapse of the USA.

~~~
jpadkins
So the answer is to keep the corrupt system going as long as possible?

I think a collapse of the USA could be the best thing for ordinary US citizens
in 10 years.

~~~
JoachimSchipper
You must have a very different definition of "collapse" then. (Compare
[http://www.foreignpolicy.com/articles/2010/06/21/12_degrees_...](http://www.foreignpolicy.com/articles/2010/06/21/12_degrees_of_failure),
and note that lots of people there would happily trade with you.)

------
jonknee
It appears he's adding up all the overnight and very short term loans together
to get his crazy high figures. If I borrow and repay a billion dollars ten
times, I haven't risked $10b. Not to mention that these programs worked... The
money that the Fed created and loaned has been returned. No tax dollars were
lost and the inflationary risk has lapsed.

------
dpatru
Why should a group of banks in collusion with the government have the right to
get very wealthy by creating money and forcing me to accept it and use it?

To get an idea of the wealth involved, consider that most homes are purchased
with borrowed money. Over the course of thirty years, the interest payments on
the loans are two to three times greater than the cost of the homes
themselves. Now consider that it cost the banks almost nothing to make the
loan. They literally created most of the money at the time of the loan.

Thomas Edison said: People who will not turn a shovel full of dirt on the
project (Muscle Shoals Dam) nor contribute a pound of material, will collect
more money from the United States than will the People who supply all the
material and do all the work. This is the terrible thing about interest.

~~~
dantheman
In a proper functioning freemarket, one without a central bank, interest is
function of savings - delayed consumption, and thus those who earn it, those
who loaned out funds, are deserving of their reward. That is the beauty of
interest, it encourages people to work just a little bit harder and produce a
little bit extra which allows for investment in the future.

------
arethuza
Wasn't a lot of this to do with support for AIG which had been selling boat
loads of CDSs to lots of non-US banks such as RBS?

------
jarin
Sometimes I wonder if all of this government doom-and-gloom stuff seems to be
popping up more lately because it's really happening and all of this
government incompetence is just now being uncovered or if I'm just paying more
attention to it lately.

Kind of like the guy who trained himself to find golf balls everywhere.

~~~
arethuza
It doesn't surprise me, lots of things were done in a bit of a panic in late
2008 and it's no surprise that every effort was made to keep the gory details
out of sight for as long as possible.

------
JVerstry
Delusion is a powerful defense mechanism against harsh reality. Love those
posts !!!

------
haploid
Right. Except the Federal Reserve has zero impact on tax or fiscal policy.
These are not "tax dollars".

The means by which the Fed extracts wealth from US citizens is not by
taxation, but by inflation, since they effectively control the monetary base
on which the money supply rests.

Some would argue that inflation is worse than taxation, since it
disproportionately affects the lower class who pay the leading inflation "tax"
in higher food and energy prices.

But that's an argument for another day. The fact is that journalists
habitually get it wrong when they refer to the Federal Reserve as using "tax
dollars", which is a blatant lie.

Also, as ars pointed out, these are currency swaps and loans, not handouts.

~~~
jpadkins
loans and swaps on toxic assets are essentially handouts. The real market
value was probably less than 10% of the collateral price.

A different way to show it was a handout: What if the Federal Reserve gave out
loans to all Americans with underwater loans (against the purchased price of
the house, not current market value)? Why did the Fed give out loans to the
CDS and loan holders of those very same assets? Isn't the default risk the
same?

------
meatsock
the subtitle asks if the crimes at hand are too big to comprehend -- this
seems like an ultimate challenge to the mind of a hacker. complexity? bring it
on.

~~~
meatsock
OK, noone else likes complexity. my bad.

------
jpadkins
This could be a good opportunity for a new international credit and currency
system. I think an open standard, private sector based currency has a better
chance than the G20 agreeing on a new reserve currency (nobody wants to anoint
the next US).

Only startup I know working on this is bitcoin, any other alternative
currencies?

~~~
bretpiatt
We have many "private sector currencies" right now. Most people don't keep
their assets in cash. If I buy any hard asset it is a currency -- not as
directly liquid as cash since we don't have laws in place requiring a store to
take my fine art in exchange for groceries.

As far as online currency, Facebook has the best chance to establish this:
<http://www.facebook.com/credits/>

~~~
jpadkins
Interesting. I thought it would come from the international B2B space, not
consumer. Facebook credits is very interesting, thanks!

