Recently Gov. Perry of Texas and presidential candidate accused Bernanke of treason or that his actions were treasonous…..many pundits condemn his statement as amateur swagger….that it was a rookie mistake on the first couple of days on the campaign trail…and as much as it pains me…..(pause here for grimacing)……he could be right.
What! Prof. Chuq is siding with Perry?
Sorry, but Perry does have a point in his statement…..
The Federal Reserve is quietly continuing with one of the many outrageous bank-bailout programs it initiated during the financial crisis–the one in which it pays big banks interest on their “excess reserves.”
What are “excess reserves”?
Money that the banks have but aren’t lending out–money that banks are just keeping on deposit at the Fed.
The Fed is paying banks 0.25% interest on this money.
0.25% interest may not sound like much, but it’s more than the banks are paying you to keep money in your savings or money-market account. It’s also more than you’ll earn if you lend the Federal government money for 2 years.Why on earth is the Fed paying banks not to lend? Well, back in the financial crisis, the Fed wanted to find ways to secretly bail out the banks without it being screamingly obvious to every American that that was what it was doing. And this particular bailout program was one of the more successful ways it discovered of doing that. Over the past few years, this program has secretly funneled about $10 billion in risk-free cash (rough estimate) directly to the banks, just for being banks and not lending. Don’t you wish you could get in on that game?
The Fed pays banks about $4 billion of interest a year on that money–the money the banks aren’t lending. And bankers get big bonuses based on that interest, for being so smart as to not lend money and instead just take the free interest from the Fed.Source:BI
Read the entire piece at Business Insider and then say that you cannot understand the frustration that Perry may feel….personally, I think the Perry is an idiot and most likely never heard of the piece in BI….but beyond all that…..we are still being screwed by the Banksters and we are smiling all the time…..how smart are we?
But let me add……I think Prick….my bad……Rick Perry is an idiot…he is a self-serving little toad…Just so there is NO confusion of what I really think of this arrogant snake……if he wins the election in 2012, I will look for property in Nova Scotia…….why? All is lost for this country!
Interesting. But is it treason?
Larry, of course it is not treason……But I do feel the the Fed has too much power to control the entire economy and too mnuch power to help corporations over the people like you and me…..
I’m with ya on Perry. The bank/Fed thing is very interesting.
Hansi…….In some small part I am with the Libertarians on the power of the Fed……and their stand on government out of private lives….but the rest of it still makes me think they are ……well I will not go into it for it would give them more recognition than they deserve…..
You know I cannot help but to think that the fed helped in one of the greatest scams of the century. Everything that the fed has done has been to the benefit of the major banks. It kept the ones that caused the crisis afloat through shenanigans such as this.
How can this not be considered a massive transfer of wealth from the lower 98% of the population to the upper 2%?
When the crisis hit, a lot of money was destroyed from the economy through the loss of value in real estate and personal investments (401k accounts). The fed printed up trillions of dollars. All of that money went to those that caused the crisis. None went to those who suffered losses caused the fall out. Hell of a scam if you ask me.
Exactly….the Fed is just as guilty as the banksters…….