The Federal Reserve Is Bailing Out FOREIGN Banks … More than the American People or Economy

[kpete]

Last edited Tue Jul 30, 2013, 10:25 AM - Edit history (1)

Federal Reserve Policy Mainly Benefits Big Foreign Banks
by Washingtons Blog - July 30th, 2013, 5:00am

The Federal Reserve Is Bailing Out FOREIGN Banks … More than the American People or Economy

We’ve extensively documented that the Federal Reserve is intentionally locking up bank money so that it is not loaned out to Main Street. Specifically – due to Fed policy – 81.5% of all money created by quantitative easing is sitting there gathering dust in the form of “excess reserves” … instead of being loaned out to help Main Street or the American economy.

And we’ve extensively documented that a large percentage of the bailouts went to foreign banks ... (A 2010 Fed audit also revealed that of the $1.25 trillion of mortgage-backed securities the central bank purchased after the housing bubble popped, some $442.7 billion - more than 35% – were bought from foreign banks.)

It turns out that these themes are all connected.

Specifically, most of the Fed-created money which is gathering dust is actually being held by foreign banks.

The Levy Economics Institute noted in May:
http://www.levyinstitute.org/pubs/wp_763.pdf

Excess reserves are the surplus of reserves against deposits and certain other liabilities that depository institutions (loosely called “banks”) hold above the amounts that the Board requires within ranges set by federal law. The general requirement is that covered institutions maintain reserves at least equal to ten percent of liabilities payable on demand. For the first time in history, there is statistical evidence that as much as one-half or more of excess reserves are held for United States banking offices of foreign banks.

Zero Hedge reports today:
http://www.zerohedge.com/news/2013-07-27/liquidity-update-record-high-deposits-fed-reserves-and-foreign-bank-cash-fed-owns-31

As per last night’s (Federal Reserve) H.8 update, commercial bank deposits rose by $94 billion in the week ended July 17: the fourth largest weekly increase in history …. This took total commercial bank deposits to an all-time high of $9.54 trillion.

***

The entire difference can be attributed to the $2+ trillion in excess reserves created by the Fed since the start of the global financial crisis .


MORE (plus a gazillion charts):
http://www.ritholtz.com/blog/2013/07/federal-reserve-policy-mainly-benefits-big-foreign-banks/

[leveymg]

1. I've been pointing this out since 2008. Issue then was capital flight, now it's anticipation

of another banking crisis and building of resources to keep the institutions afloat for a while.

[FreakinDJ]

2. Gee who wuld da thunk it

[Scuba]

3. So why hasn't the President said anything about this?

Why not Harry Reid? Any Democratic leader? Are they clueless? Or complicit?

[Snowfield]

5. some anwers

http://billmoyers.com/2013/01/31/barack-obama-wall-street-co-conspirator/

After all the big news last week about Barack Obama’s all-too-close relationship with Wall Street, my dad and I got into a back and forth email exchange about whether to feel optimistic about the president’s second term and about how to explain the administration’s refusal to prosecute a single banker connected to the financial meltdown.

Though my father is no Obama apologist by any stretch, his politics lean liberal, and so in response to watching last week’s PBS Frontline report, he asked me questions that were similar to those I’ve heard before. He wants to believe Obama really hopes to “hold Wall Street accountable,” as the president claimed, and so my dad wonders whether the president’s refusal to do so can be explained by something other than corruption. He wants to believe — or at least to explore the possibility — that the depressing situation isn’t simply about Obama raking in massive Wall Street contributions and then paying back his donors with immunity from prosecution — immunity, mind you, that the rest of us are not afforded.

It goes without saying, of course, that when this line of discussion is initiated by liberals about Obama, there is a serious double standard at work. Simply put, if a Republican was president right now and hadn’t prosecuted a single banker and had appointed a scandal-plagued Wall Street defense lawyer to head the SEC, liberals would be — rightly — screaming bloody murder on Twitter, on Facebook, on blogs and on cable television. They wouldn’t be looking for ways to excuse that president from personal culpability, nor would they be looking to claim the situation exemplified anything other than the kind of ugly-but-legal bribery that dominates American politics.

--------------------------------------------

Is Wall Street Still “Untouchable”?

http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/untouchables/is-wall-street-still-untouchable/

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The Federal Reserve Shows Barack Obama Who The Real Boss Is

http://theeconomiccollapseblog.com/archives/the-federal-reserve-shows-barack-obama-who-the-real-boss-is

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from 2 years ago

Bernie Sanders -major statement on how the Fed looted $16 Trillion to bail out banks (many foreign)

http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

The Fed Audit

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As 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 Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No 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.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.

snip


GAO FULL REPORT

http://www.sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf

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[AnotherMcIntosh]

7. If he only knew, surely he would do something. The question is, Why are they keeping it from him?

[jtuck004]

11. They have, repeatedly.

Obama to Bankers: I’m Standing ‘Between You and the Pitchforks’ Here

And now they want to give corporations a gift of lower taxes to make the investments they should have been making anyway, here, and shave Social Security with the magic math of the chained cpi, which is easy enough to search on DU for.

Oh, yeah, and it's "those people over there that are holding everything up".

I sure am glad that in 1933 we didn't tell the bankers, "yeah, well, here's more money, we just KNOW that if we make you richer it will be great for EVERYONE", instead of rallying the people of the nation, putting laws in place to protect them instead of feeding them to the bankers.

I can only imagine the tragedy of watching a national slowly became smaller than its promise. They would have watched as what good jobs there were began to be replaced wholesale by part-time or no jobs at all, people wouldn't have been able live on the meager bits and pieces corporations paid them. The people, in a pain they could not have put into words, would have watched their infrastructure crumble while they and their neighbors moved closer to poverty by the tens of millions. And all the while our leaders, instead of being on the side of working people, would have sided with the bankers and pretended to be doing something, but instead spent their time making excuses and pointing fingers at another political party as the cause, while they shoveled assets into their banker friend's pockets, instead of using them it to feed, educate, and house a whole nation of people.

Man, I wouldn't have wanted to live through that. Can you imagine how bad that would have looked in our history books?

But our leaders wouldn't have done that. They were better than that. And we learned from it.

[gtar100]

4. Country? What country? We've got money to make, folks!

The Federal Reserve deserves to be sued for using a false identity with the intent to defraud.

[hughee99]

6. So now even the FED is creating offshore accounts in foreign banks?

This can't be good.

[AnotherMcIntosh]

8. Are the foreign banks, through international banksters, making campaign contributions?

We can't outbid them because "our" politicians will take our money and theirs as well.

[Ichingcarpenter]

9. Federal Reserve refuses audit on Germany gold held in US

Federal Reserve Refuses to Submit to an Audit of Germany’s Gold Held in U.S. Vaults


http://nsnbc.me/2013/04/18/federal-reserve-refuses-to-submit-to-an-audit-of-germanys-gold-held-in-u-s-vaults-2/

[matthews]

10. And people acted surprised when they found out Obama wanted to bring back

Larry Summers to run the Fed. They forget 'birds of a feather' or 'water sinks to its own level'. Both perfect analogies when discussing Obama administration appointments.

After Pritzger at Commerce, nothing should be a surprise.

[woo me with science]

12. K&R

[Mojorabbit]

13. K and R nt

[Mojorabbit]

14. K and R nt