The road to financial disaster? - by Rick Morren
A report on Wednesday from Bloomberg which showed that the US Fed is prepared to lend another $7.4 trillion on behalf of U.S. taxpayers to "further" rescue the troubled US financial system, got my attention. According to that story, this $7.4 trillion dollar amount is half of the value of everything produced in the US in the past year! This enormous pledge of funds includes $2.8 trillion already siphoned off by financial institutions in the most important response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment also dwarfs the only plan that was actually approved by the US Congress, the so-called Treasury Department’s $700 billion Troubled Asset Relief Program (TARP), better known before as the bail-out plan. The report also notes that the US Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.
When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, you can only wonder why this is happening. Worse, it is happening without much or any reaction from the Congress or the Public at large.
You don't need to be an Einstein to see that there seems to be something "fishy in Denmark", as to the huge amounts of liquidity the Bush Administration is pulling out of the US national coffers at warp speed before they leave office? Whether it’s lending or spending, it’s tax dollars that are going out the window and the US taxpayer is apparently ending up holding "collateral" they don’t know anything about. Shouldn't the "Obama team" start blowing the whistle? Where is all this transparency we were promised by all of them.
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