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Ron Paul shows how the Fed helped create Euro crisis through foreign bank loans

The American people have little idea that their tax money, originally loaned out by the Fed to foreign banks in 2008, has helped create the debt crisis in Europe that is now taking place in Greece, Ireland, and the other PIIGS nations.  On June 3rd, Ron Paul spoke on the hearing that took place with representatives of the Federal Reserve, and how the Fed actually loaned more money to foreign banks than it did to American ones, using TARP funds provided by the American taxpayer.

Out of the funds loaned through the Fed's credit facilities, nearly one-third was loaned to foreign banks. Some facilities and programs, such as the Mortgage-Backed Securities Purchase Program, the Commercial Paper Funding Facility, and the TSLF, provided more than half of their funding to foreign banks. During the peak of the financial crisis, up to 88% of overall discount window lending went to foreign banks, and nearly 100% of the New York Fed's discount window lending went to foreign banks. – Lew Rockwell

Under this lending facility, which was tied to the governments TARP program, loans were given to banks such as Credit Suisse, and Deutsche Bank to keep them from insolvency.  That money was provided by Congress, and the American taxpayer, and issued out through the Fed.  In a recentdiscovery, this money was loaned out through a special lending facility knows as St OMO, which gave foreign banks loans at .01% (virtually free), while at the same time charging American institutions .5% at the Fed window.

The irony of this bailout of nearly insolvent foreign banks is that these same institutions are the primary lenders who are putting the squeeze on Greece, and demanding their national assets now to pay this debt.  Had the Federal Reserve not provided this taxpayer money through the TARP programs to Credit Suisse and Deutsche Bank, neither of these institutions would have any legal say in the ongoing credit crisis taking place in Europe.  They would have unwound and become insolvent, just as much of the European debts would have unwound from 2008.

The hearing last week by Ron Paul, and the Congressional Financial Services Committee, unveiled some, but not all, of the mechanisms performed without transparency by the Federal Reserve during the 2008 credit crisis.  As we now discover that more than half of the money provided by the American taxpayers through Congress to the Fed went to bail out foreign banks, future hearings are sure to follow which may reveal more information on how the Fed's foreign bank lending to stem insolvency actually helped create the current debt crisis and sovereign battles taking place in Greece, Ireland, and other nations.

Reposted by02mydafsoup-01 02mydafsoup-01

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