http://www.bloomberg.com/apps/news?pid=20601087&sid=aXgyCIKKp6zQ&refer=home "Banks' borrowing at the rate climbed to a daily average of $13.9 billion in the week ended July 16 from $7.84 billion three months earlier." So currently banks are borrowing about $417 billion per month from the Fed? Where did the Fed get trillions of dollars to makes these loans? If this rate of borrowing continues for the next 6 months will they will borrow 2.5 trillion? Against what assets? Is this the biggest money give-away of all time? (and completely illegal/unethical as well) If this money keeps flowing we should see massive inflation soon. Perhaps this is why the Fed stopped reporting M3 and why the CPI has been monkeyed with so much. What do you guys think?
No offense, mate, but everything in your post has been discussed ad naseum here in about twenty thousand threads. So yeah, it's messed.
The asset backed commercial paper mess was written off as losses in the BILLIONS! commercial paper was sold but is now illiquid or worthless. investment banks had to buy back the subprime from investors or face lawsuits for selling fraudulent bonds.
You're right and I'm not even new to this topic. I guess even after all the talk I hadn't realized that the give away is already at least a trillion and headed towards multiple trillions. These amounts are staggering and they impact the deflation vs. inflation argument (of course).
Yep, we are witnessing the largest scam involving tax payer money in the history of the US. The sad part is no one seems to give a damn.
I think you don't understand what the fed does. They are short-term not long-term loans - your 2.5 trillion calculation makes no sense. The fed's balance sheet is published online, every week I believe. Read it for yourself.
Last time I checked, the Fed has assets of $912 billion on its balance sheet. http://www.federalreserve.gov/releases/h41/Current/ The TAF auctioned term funds with 30 day maturity. The TSL is a 28-day facility. The PDCF is an overnight facility and accepts a specified range of eligible collateral. In other words, these are short-term loans - - - and not permanent injections of money into the system.