How Bernanke Is Funneling Big Money to the Banks

Robert Auerbach writes via HuffPo:

Today in the middle of the Bernanke Fed's continuing purchase of $600 billion in Treasury securities -- its quantitative easing purchases, "QE2," which ends in June 2011 -- where do you think most of the $600 billion is going? Loans to businesses? Purchase of private sector income earning assets? No and No. Since September 2008 -- 25 months -- the Fed has pumped out an average of $49 billion a month. This monetary base of the country (currency, coin and bank reserves) is now $2.210 trillion. Over half (57 percent) of the $2.210 trillion sits in the banks as reserves drawing interest.

Recommended reading: No No, We Should Pay Banks MORE To Store Their "Money" In the Fed Vault, Duh!

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Anonymous said...

there's a guy who has been writing a blog called Dr. Housing Bubble in California for the past several years and it was guessed by him, me and some other readers that when the Fed began rolling out all this bullshit, they were not doing anything more than a back door re-capitalization of the big banks because if enough of those banks failed, the FDIC had no way of making good on their promises and that would collapse the "full faith and credit of Uncle Sam". Dominoe theory kind of shit, know what I'm sayin'? Seemed a little "tin foil hatish" back then but today? Hindsight being 20/20??Maybe not so much....