Ben Bernanke has pledged $12.3 trillion to help the banks and financial institutions. Where is all this money going? Much of it is going directly into the banks' accounts, hidden from the public.
This is how the game works. The Fed is Wall Street's biggest customer, buying massive amounts of mortgage-backed securities from banks. Now the Fed is being Mr. Nice Guy and publishes in advance the securities it intends to buy. Mr. Rip Off, the bank, simply raises the selling price to the Fed. The inflated prices produce huge profits for the banks. Of course the Fed knows all this is going on. This is simply a backdoor method of funneling government money into bank coffers.
Here's a double whammy play. The Fed announces in advance that they are buying XYZ securities. Banks now load up on these securities and sell them to the Fed at inflated prices, reaping huge profits.
Congressman Barney Frank knows about this and said that the profiteering by banks was part of the price we are paying for stabilizing the banks. He said: "You can't rescue the credit system without benefiting some of the people in it." So now we have a three-way game, the Fed, the banks and Congress.
Don't you think it's about time that the Fed funnels some of that $12.3 trillion to the consumer? Why should we keep feeding the greed of the bankers? Enough is enough.
What kinds of programs can the Fed develop that would help the consumer?
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Reader Comments (Page 1 of 1)
8-03-2009 @ 1:27PM
xenogears728 said...
How about creating directly funded government job training courses. That are not only paid for, but also give you a weekly salary to help the average joe.
8-03-2009 @ 1:35PM
jtkuch said...
Do the banks have enough incentives to increase the number of small business loans? Encourage microlending. It is small businesses who employ the majority of people and we need to improve the employment picture. I know this probably sounds elementary but if the articles in Inc. magazine & Entrepreneur are any indication, small businesses are having a hard time getting loans. I also think the commercial real estate implosion is probably preventing banks from loosening credit. Rents may not have fallen enough.http://www.calculatedriskblog.com/2009/06/commercial-mortgage-defaults-seen.html