So, the Fed created $7.77 Trillion out of thin air to loan to the banks at 0.01%

[Motown_Johnny]

http://savannahnow.com/exchange/2011-12-03/free-enterprise-77-trillion-spending-spree#.Ttooy7LNl8M

^snip^


The biggest economic news of this week, it seems, was not the ongoing struggle to save the Euro currency or the hopeful uptick in job creation. It was a blockbuster report based on freedom of information requests (long litigated in court) that the Federal Reserve had given out loans adding up to $7.77 trillion to rescue big financial institutions during the financial crisis.








Why is it we can't foreclose on those loans, take $7.52 Trillion of it and cut the national debt in half and then take the other $250 Billion and spend it on the infrastructure projects that create jobs?



Actually, why is our debt not already cut in half if that $7.77 Trillion is owed to us? Doesn't that automatically count as a credit on our balance sheet which should lower the net debt?


My ignorance must be overwhelming many of you and I apologize for that. Thanks for taking the time to indulge my curiosity/fantasies.





I think I need a shower.

[dipsydoodle]

1. You have alluded to a subject

which I don't think anyone can quite grasp.

[CanonRay]

2. What the Fed does is all "off the books"

so it doesn't count as an asset to the government. My own personal theory is that both the Fed and the banksters know they have no intention of paying it back.

[mrdmk]

3. Here is the rub, The Federal Reserve is a private group of United States and English

Financial Establishments. These Private Financial Establishments are to be kept a secrete according to 1917 bill that created the Fed. For some accountability, one-half of the officers of the Fed are vetted through Congress, the other half are appointed by the private financial establishments. There ends the creditability.

With all of the above, and in the end, these private financial establishments lent the money to themselves. Half of the Nations GDP was lent in one year. Of course, there were other loans. Of course, there was no self interest while these loans were being made. That my friend, is all there is to it.

[dkf]

4. These are overnight loans backed by collateral.

The $7 trillion isn't an average balance, it's like adding up the balance every day.

The equivalent would be to call a $100,000 mortgage $36,500,000 for a year, well less because you do land up paying some principal down but you get the drift.

Most of it has been paid back so you can't "foreclose" and get back the money and it never existed all in one day.

[Motown_Johnny]

7. it seems that number is $16.115 Trillion

cross posting from Alan Grayson



http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2431241



^snip^

Page 131 – The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. That’s right, more than $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank






I am also kinda curious how they loaned the money back out and earned $13 Billion in interest on it if it was all just day loans

[Pachamama]

5. They just started cranking up the printing presses....

A perfect 7.77 Trillion.....probably much more.....

[bemildred]

6. That's where all our money comes from, created as debt.

Almost makes you wonder if that is the right way to go about it. Who is it owed to anyway, that debt which is also our money? Hmm ...