Fed Bailing out the World

Risky loans to foreign bankers could end up bringing down U.S. house of financial cards

For Alan Greenspan and Ben Bernanke, it’s the stuff that dreams are made of. The Federal Reserve is now acting as the central bank to the world, loaning billions of U.S. dollars to foreign banks and propping up the entire global system of debt.

It’s no secret that bankers around the world meet periodically to coordinate their efforts and keep the private banking industry booming. Almost every month, high-level meetings take place under the cover of organizations such as the Aspen Institute, the Group of Seven, the World Bank and the Bilderberg Group.

In this time of severe economic turmoil, however, “the Fed” has been accused of putting the entire U.S. economy at risk by loaning billions of dollars to shaky foreign central banks in an effort to keep them solvent.

Known in banker parlance as a “currency-swap arrangement,” or CSA, the Fed has so far made an estimated $30 billion in direct loans to foreign banks in South Korea, Mexico, Brazil and Singapore purportedly to protect the countries from slash-and-burn currency speculators, who are moving hundreds of billions of dollars out of foreign currencies and into the U.S. dollar and Treasury bills.

Federal Reserve officials say they are simply coming to the aid of what they call “emerging markets.” The foreign banks are purportedly being overrun as currency traders seek a hedge against failing currencies. But what the Fed is really doing is trading U.S. greenbacks for pesos, wons, reals—and any other currency out there no matter what it is worth.


~ by spyaokid on November 8, 2008.

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