It looks like another Federal Reserve bailout of Europe is on the way.
As Bloomberg's Bradely Keoun reports, "Fed Chairman Ben S. Bernanke yesterday told a closed-door gathering of Republican senators that the Fed won’t provide more aid to European banks beyond the swap lines and the discount window -- another Fed program that provides emergency funds to U.S. banks, including U.S. branches of foreign banks." Well, between a trillion plus in FX swap lines, and a surge in discount window usage . . . there really is nothing else that the Fed can possibly do, as these actions along amount to a QE equivalent liquidity injection, only denominated in US Dollars.
ZeroHedge.com
One could wonder what Republican Senators were talking about behind closed doors with the Chairman of the Federal Reserve, but whether they were demanding another bailout of the European banks or expressing their concerns against such a bailout, it looks like a Fed bailout of Europe's collapsing banking system is on the way no matter what. Bernanke really skates the line in his comment above, but what he makes clear is that the Federal Reserve WILL help the European banking system through the swap line and the discount window. That's right, we're going to be bailing out foreign banks. Again. You can call it TARP or a loan made through the Fed's "discount window" or credit on a swap line, whatever. It is a bailout from the American Federal Reserve to a foreign financial firm. If these banks were trying to cross our southern border Republicans would be up in arms and demanding that we deport these banks. If we needed more proof that there IS money in America, that we are not 'broke', and tha our national treasury could be used to rebuild America and get us back to work again, well, this is it, because when it comes to bailing out banks, even foreign banks, we have infinite free money at hand. Unreal.
Now, I think Jon Stewart can say it better than I can, so let me allow Jon to explain just how the discount window at the Federal Reserve works in a little segment I'd like to call; "Our Government is the world's dumbest loan shark."
Short transcript and more below the fold . . .
Well, here is the short version. Remember that time that the Federal Reserve gave a $7.7 Trillion secret bailout to financial firms? They did so through the discount window, which allows banks to borrow from the Fed at 0.01% interest. As Jon states, 0.01% isn't below market value, that's free, and when you and I go to the bank we go through "the inexplicable fee window"
If you want to realize how bad Wall Street wrecked the world economy with their greed, consider the fact that $7.7 Trillion dollars a few years ago wasn't nearly enough because financial firms are still demanding MORE Federal Reserve largess.
So what was Wall Street doing with this free money?
"If you're a bank, it means you can borrow money for free from the fed at zero, and then reinvest it in treasuries at 3%"
And now we are going to open up funds to struggling European banks through the discount window. Enjoy your FREE MONEY!
As Mr. Stewart sums it up . . .
"Basically the government was lending banks money at no interest and then borrowing it back from the banks at interest. Our Government is the world's dumbest loan shark. The government was selling dollar bills to the banks at 97 cents, and the banks had the balls to bonus their employees for being smart enough to say "okay". For the banks its' a perpetual money machine."
It's not a perpetual money machine. It's a racket. It is a crime and a travesty, because it is not the banksters or the politicians or the technocrats at the Fed who will suffer this massive transfer of wealth from the USA Treasury to the banksters. Further, it is an absolute outrage that in a time when budgets are being viciously gutted in the name of austerity, when working class people are being told that they must shoulder the sacrifice for a disaster that they did not create, while the wealthiest 1% are doing better than ever, it is an outrage to tell these working class people that we are broke and there is no money for them, but the banksters are being given FREE MONEY!
And now we are going to allow the American Federal Reserve offer funds to Foreign Banksters through the discount window while opening up over a trillion dollars or more to those foreign banksters via the Fed's swaps program, as Anthony Sanders stated just this Friday in his testimony to the Congressional Oversight Committee.
But don't worry, Fed Chairman Bernanke consoles us, there won't be any more aid then that.
We are not broke. WE ARE NOT BROKE! We have allowed the banksters to impoverish us at the expense of the vast majority of America. So don't you dare tell me we are broke when we have seemingly infinite money to throw at wars and banksters.
Lend me a dollar at 0.01%, I will turn this economy around overnight.
And they wonder why we need Occupy Wall Street so badly. They wonder why we march.
I love this video
All day, all week, Occupy Wall Street. And don't forget the crime scene down at the Federal Reserve. FREE MONEY, but only if you are an oligarch or a Too Big To Fail bankster. The rest of you peasants can go piss off.
You can follow me on Twitter @JesseLaGreca